Question
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)
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 companys income statement and balance sheets follow.
FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 | |||||||
2017 | 2016 | ||||||
Assets | |||||||
Cash | $ | 58,900 | $ | 79,500 | |||
Accounts receivable | 74,830 | 56,625 | |||||
Inventory | 284,656 | 257,800 | |||||
Prepaid expenses | 1,270 | 2,015 | |||||
Total current assets | 419,656 | 395,940 | |||||
Equipment | 151,500 | 114,000 | |||||
Accum. depreciationEquipment | (39,625 | ) | (49,000 | ) | |||
Total assets | $ | 531,531 | $ | 460,940 | |||
Liabilities and Equity | |||||||
Accounts payable | $ | 59,141 | $ | 123,675 | |||
Short-term notes payable | 11,800 | 7,200 | |||||
Total current liabilities | 70,941 | 130,875 | |||||
Long-term notes payable | 62,000 | 54,750 | |||||
Total liabilities | 132,941 | 185,625 | |||||
Equity | |||||||
Common stock, $5 par value | 174,750 | 156,250 | |||||
Paid-in capital in excess of par, common stock | 43,500 | 0 | |||||
Retained earnings | 180,340 | 119,065 | |||||
Total liabilities and equity | $ | 531,531 | $ | 460,940 | |||
FORTEN COMPANY Income Statement For Year Ended December 31, 2017 | ||||||
Sales | $ | 612,500 | ||||
Cost of goods sold | 291,000 | |||||
Gross profit | 321,500 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 26,750 | ||||
Other expenses | 138,400 | 165,150 | ||||
Other gains (losses) | ||||||
Loss on sale of equipment | (11,125 | ) | ||||
Income before taxes | 145,225 | |||||
Income taxes expense | 32,650 | |||||
Net income | $ | 112,575 | ||||
Additional Information on Year 2017 Transactions
Net income was $112,575.
Accounts receivable increased.
Inventory increased.
Prepaid expenses decreased.
Accounts payable decreased.
Depreciation expense was $26,750.
Sold equipment costing $64,875, with accumulated depreciation of $36,125, for $17,625 cash. This yielded a loss of $11,125.
Purchased equipment costing $102,375 by paying $42,000 cash and (i.) by signing a long-term note payable for the balance.
Borrowed $4,600 cash by signing a short-term note payable.
Paid $53,125 cash to reduce the long-term notes payable.
Issued 3,100 shares of common stock for $20 cash per share.
Declared and paid cash dividends of $51,300.
Required: Prepare a complete statement of cash flows using a spreadsheet; report its operating activities using the indirect method. (Enter all amounts as positive values.)
Chapter 12 Problems Help Save & Exit Submit Check my work 3 Required information FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Year Ended December 31, 2017 Part 2 of 2 Analysis of Changes Debit December 31, 2016 Credit December 31, 2017 points Balance sheet-debit Cash 79,500 56,625 257,800 2,015 114,000 509,940 58,900 Accounts receivable eBook Prepaid expenses Equipment Print 58,900 Balance shee-credit Accumulated depreciation-Equipment Accounts payable Short-term notes payable Long-term notes payable Common stock, $5 par value Paid-in capital in excess of par value, common stock Retained earnings 49,000 123,675 7,200 54,750 156,250 119,065 509,940 Statement of cash flows Operating activities Graw Hill KPrex 3 of 5 Next>Step by Step Solution
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