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 $ 597,580 288, eee 309,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income $ 135,480 23,750 159,150 (8,125) 142, 225 28,450 $ 113,775 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 54,480 70,310 280, 156 1,280 486,146 154,500 (38,125) $ 522,521 $ 76,500 53,625 254,800 2,085 386,930 111,wee (47,580) ) $ 450, 430 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 $ 56, 141 10,9ee 67,841 63,5ee 130,541 $ 119,175 6,680 125,775 51,750 177,525 153,250 167,250 42,000 182,730 $ 522,521 119,655 $ 450, 430 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $8,125 (details in b). b. Sold equipment costing $55,875, with accumulated depreciation of $33,125, for $14.625 cash. c. Purchased equipment costing $99.375 by paying $36.000 cash and signing a long-term note payable for the balance. d. Borrowed $4,300 cash by signing a short-term note payable. e. Paid $51.625 cash to reduce the long-term notes payable f. Issued 2.800 shares of common stock for $20 cash per share g. Declared and paid cash dividends of $50.700. 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.) a ) 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: Income statement items not affecting cash Changes in current assets and current liabilities S 0 Cash flows from investing activities 0 Cash flows from financing activities: 0 0 S S Net increase (decrease) in cash Cash balance at December 31. prior year Cash balance at December 31, current year S 0
