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. 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 $ 607,500 290,000 317,500 $ 137,400 25,750 163,150 (10,125) Income before taxes Income taxes expense Net income FORTEN COMPANY Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities Equity 144,225 31,250 $ 112,975 Current Year Prior Year $ 57,400 73,320 283,156 $ 78,500 55,625 256,800 1,260 1,995 415,136 392,920 152,500 (39,125) $ 528,511 $ 58,141 74,000 132,141 170,250 113,000 (48,500) $ 457,420 $ 122,175 60,750 182,925 Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions 155,250 45,000 0 181,120 119,245 $ 528,511 $ 457,420 a. The loss on the cash sale of equipment was $10,125 (details In by. b. Sold equipment costing $61,875, with accumulated depreciation of $35,125, for $16,625 cash. c. Purchased equipment costing $101,375 by paying $40,000 cash and signing a long-term notes payable for the balance. d. Paid $48,125 cash to reduce the long-term notes payable. e. Issued 3,000 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $51,100. Required: 1. Prepare a complete statement of cash flows using the Indirect method for the current year. Note: 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: Income statement items not affecting cash Changes in current assets and current liabilities 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 $ 0 0 0 $ 0 $ 0