Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required Information [The following information applies to the questions displayed below.) Forten Company's current year income statement, comparative balance sheets, and additional Information follow. For

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Required Information [The following information applies to the questions displayed below.) Forten Company's current year income statement, comparative balance sheets, and additional Information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. S 632,500 295,000 337,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 142,400 Depreciation expense 30,750 Other gains (lossen) Loss on sale of equipment Income before taxes Income taxes expenso Net income 173, 150 (15,125) 149,225 38, 250 $ 110,975 110,3 3 Net income FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 64,900 80,870 290,656 1,310 437, 736 147,500 (41,625 ) $ 543.611 $ 83,500 60,625 261,800 2,095 408,020 118,000 (51,000) $ 475,020 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation Equipment Total assets Liabilities and Equity Accounts payable Long-term noten payable Total liabilities Equity Common stock, 55 par value Paid-in capital in excess of par, common stock Retained earning Total liabilities and equity $ 63,141 73,000 136,141 $ 129,675 66.250 196,425 177,750 52,500 177,220 $ 543,611 160,250 0 118,345 $475,020 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $15,125 (details in b), b. Sold equipment costing $76,875, with accumulated depreciation of $40,125, for $21,625 cash. c. Purchased equipment costing $106,375 by paying $50,000 cash and signing a long-term notes payable for the balance. d. Paid $50,125 cash to reduce the long-term notes payable. e. Issued 3,500 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $52,100. . Navt Required: Part 2 of 2 Prepare a complete statement of cash flows using the direct method. (Amounts to be deducted should be Indicated with a minus sign.) 14 points Sipped FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities ellow Print 0 Cash flows from investing activities 0 Cash flows from financing activities 0 Required information For Current Year Ended December 31 Cash flows from operating activities $ 0 Cash flows from investing activities 0 Cash flows from financing activities 0 $ Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ o

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting For Non Specialities

Authors: Peter Atrill, Eddie McLaney

2nd Edition

0139833625, 9780139833625

More Books

Students also viewed these Accounting questions