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, (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. FORTEN COMPANY Comparative Balance Sheets December 31 Prior Year Current Year Assets $ 78,400 Cash 92,500 69,625 270,800 2,275 Accounts receivable 94,460 304,156 1,400 Inventory Prepaid expenses Total current assets 478,416 138, 500 (46,125) 570, 791 435,200 127,000 (55,500) Equipment Accum. depreciation-Equipment 506,700 Total assets Liabilities and Equity Accounts payable Short-term notes payable $143,175 9,800 72,141 15,700 87,841 55,500 Total current liabilities 152,975 67,750 Long-term notes payable Total liabilities 143,341 220,725 Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings 191,250 66,000 170, 200 169,250 116,725 570, 791 Total liabilities and equity 506,700 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses $677,500 304,00e 373,500 $39,750 151,400 191,150 Other gains (losses) Loss on sale of equipment Income before taxes (24,125) 158,225 50,850 Income taxes expense $107,375 Net income Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $24,125 (details in b) b. Sold equipment costing $103,875, with accumulated depreciation of $49,125, for $30,625 cash. c. Purchased equipment costing $115,375 by paying $68,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,900 cash by signing a short-term note payable. e. Paid $59,625 cash to reduce the long-term notes payable. f. Issued 4,400 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,900. Required: 1. Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: Cash flows from investing activities Cash flows from financing activities: Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year Required: Prepare a complete statement of cash flows using a spreadsheet using the indirect method. (Enter all amounts as positive values.) FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 Anal ysis of Changes December 31 December 31 Credit Debit Prior Year Current Year Balance sheet-debit Cash 92,500 78,400 Accounts receivable 69,625 Inventory 270,800 Prepaid expenses 2,275 Equipment 127,000 78,400 562,200 Balance sheet-credit Accumulated depreciation-Equipment 55,500 Accounts payable 143,175 Short-tem notes payable 9,800 Long-term notes payable Common stock, 5 par value Paid-in capital in excess of par value, common 67,750 169,250 0 stock Retained eamings 116,725 562,200 Statement of cash flows Operating activities Investing activities Financing activities Non cash investing and financing activities Purchase of equipment financed by long-term note payable