Required information [The following information applies to the questions displayed below.] Forten Company, a merchandiser, recently completed its calendar year 2017 operations. 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, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's income statement and balance sheets follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 $ 67,900 B3.890 293,656 1,330 446.776 145,500 (42,625) $549,651 $ 85,500 62.625 263,800 2,135 414.060 120.000 (52,000) $482,060 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 65,141 13,600 78,741 59,000 137,741 $132, 675 8,400 141, 075 60,750 201, 825 186,750 49,500 175,660 $549,651 162,250 117,985 $482,060 $642,500 297,000 345,500 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 32,750 Other expenses 144,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 177,150 (17, 125) 151, 225 41,050 $110, 175 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $17,125 (details in b). b. Sold equipment costing $82,875, with accumulated depreciation of $42,125, for $23,625 cash. c. Purchased equipment costing $108,375 by paying $54,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,200 cash by signing a short-term note payable. e. Paid $56,125 cash to reduce the long-term notes payable. f. Issued 3,700 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $52,500. Required: Prepare a complete statement of cash flows; report its operating activities according to the direct method. (Amounts to be deducted should be indicated with a minus sign.) X Answer is not complete. FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Depreciation expense 110,175 Increase in accounts receivable 32,750 Increase in merchandise inventory (21,265) Decrease in prepaid expenses (29,856) Decrease in prepaid expenses 805X Net cash provided by operating activities Cash flows from investing activities X $ $ 92,609 Cash flows from financing activities