Required information Use the following information for the Problems below [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 company's income statement and balance sheets follow FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $ 79,900 $ 93,500 70,625 271,800 2,295 438,220 128,000 56,000 $ 573,811 510,220 95,970 305,656 1,410 482,936 137,500 46,625 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 $ 73,141 144,675 16,000 10,906 8.141 154,675 68,750 144,141223,425 55,000 170,250 202,750 57,500 169,420 116,545 $573,811 510,220 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $ 682,5060 305,000 377,500 Depreciation expense $ 40,750 Other expenses Other gains (losses) 152,400 193,150 Loss on sale of equipment Income before taxes Income taxes expense Net income 25,125 159,225 52,250 $ 106,97.5 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $25,125 (details in b). b. Sold equipment costing $106,875, with accumulated depreciation of $50,125, for $31,625 cash. c. Purchased equipment costing $116,375 by paying $70,000 cash and signing a long-term note payable for the balance. d. Borrowed $6,000 cash by signing a short-term note payable. e. Paid $60,125 cash to reduce the long-term notes payable. f. Issued 4,500 shares of common stock for $20 cash per share g. Declared and paid cash dividends of $54,100. Required information For Year Ended December 31, 2017 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: Cash flows from investing activities Cash flows from financing activities: Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year
