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 Current Year Prior Year Assets Cash $ 67,900 $ 85,500 Accounts receivable 83,890 62,625 Inventory 293,656 263,800 Prepaid expenses 1,330 2, 135 Total current assets 446,776 414,060 Equipment 145,500 120,000 Accum. depreciation-Equipment (42,625) (52,000) Total assets $549,651 $482,060 Liabilities and Equity Accounts payable $ 65,141 $132,675 Short-term notes payable 13,600 8,400 Total current liabilities 78,741 141, 075 Long-term notes payable 59,000 60,750 Total liabilities 137,741 201,825 Equity Common stock, $5 par value 180,750 162,250 Paid-in capital in excess of par, 55,500 common stock Retained earnings 175,660 117,985 Total liabilities and equity $549, 651 $482,060 0 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $642,500 Cost of goods sold 297,000 Gross profit 345,500 Operating expenses Depreciation $ 32,750 expense Other expenses 144,400 177, 150 Other gains (losses) Loss on sale of (17, 125) equipment Income before taxes 151,225 Income taxes expense 41,050 Net income $110, 175 Additional Information on Current Year 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: 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.) State FURTEN CUMPANT Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Net income $ 110,175 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense 32,750 Loss on disposal of equipment 17,215 Accounts receivable increase (21,265 Inventory increase (29,856 Prepaid expense decrease 1,330x Accounts payable decrease (67,534 $ 42,815 Net cash provided by investing activities Cash flows from investing activities Cash paid for equipment Cash received from sale of equipment 25,500X 23,625 49,125 Net cash provided by investing activities Cash flows from financing activities: Cash received from issuing stock Cash paid for dividends Cash borrowed on short-term note Cash paid on long-term note 74,000 (52,500 5,200 (56,125 Net cash provided by financing activities Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year (29,425) $ 62,515 85,500 148,015 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 Analysis of Changes December 31, Debit Credit Prior Year December 31, Current Year $ $ 67,900 Balance sheetdebit Cash Accounts receivable Inventory Prepaid expenses Equipment 85,500 62,625 263,8001 2,135 120,000 534,060 $ $ 67,900 $ Balance sheet-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 52,000 132,675 8,400 60,750 162,2501 117,985 534,060 $ $ 0 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 $ 0 $ 0