Required information Use the following information for the Problems below. (Algo) [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 Yor Current Year Ended December 31 Sales $657,500 Cost of goods sold 300,000 Gross profit 357,500 Operating expenses (excluding depreciation) $147,400 Depreciation expense 35,750 183,150 Other gainn (losses) Loss on sale of equipment (20.125) Income before taxes 154,225 Income taxes expense 45,250 Net Income $108,975 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year $ 72,400 88, 420 298,156 1,360 460,336 142,500 (44,125) $558.711 Prior Year $ 38,500 65,625 266,800 2.195 423120 123,000 53.500) 5492,620 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 $ 68,141 24.500 62,641 57,500 140,141 $137.175 9.000 146,175 63.750 209,923 185,250 60,000 173,320 $558,711 165,250 0 127.445 $492,620 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $20,125 (details in b). b. Sold equipment costing $91,875, with accumulated depreciation of $45,125, for $26,625 cash, c. Purchased equipment costing $111,375 by paying $60,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,500 cash by signing a short-term note payable. e. Paid $57,625 cash to reduce the long-term notes payable. f. Issued 4,000 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,100. Problem 12-3A (Algo) Indirect: Statement of cash flows LO A1, P2, P3 Problem 2-3A (Algo) Indirect: Statement of cash flows LO A1, P2, P3 Reqd: 1. Prepare a complete statement of cash flows using the indirect method for the current year. (Am 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 $ 0 Cash flows from investing activities 0 Cash flows from financing activities: 0 $ 0 Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0
