Required information Use the following information for the Problems below. [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 $ 55,900 71,810 281,656 1,250 410,616 153,500 (38,625) $ 525,491 $ 77,500 54,625 255,800 1,975 389,900 112,000 (48,000) $ 453,900 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 $ 57,141 11,200 68,341 63,000 131,341 $ 120,675 6,800 127,475 52,750 180,225 154,250 168,750 43,500 181,900 $ 525,491 119,425 $ 453,900 $ 602,500 289,000 313,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 24,750 Other expenses 136,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 161,150 (9,125) 143, 225 29,850 $ 113,375 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $9,125 (details in b). b. Sold equipment costing $58,875, with accumulated depreciation of $34,125, for $15,625 cash. c. Purchased equipment costing $100,375 by paying $38,000 cash and signing a long-term note payable for the balance. d. Borrowed $4,400 cash by signing a short-term note payable. e. Paid $52,125 cash to reduce the long-term notes payable. f. Issued 2,900 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $50,900. Problem 12-3A Indirect: Statement of cash flows LO A1, P2, P3 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.) 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, Prior Year Debit Credit December 31 Current Year s S 55,900 Balance sheet-debit Cash Accounts receivable Inventory Prepaid expenses Equipment 77,500 54,625 255,800 1.975 112.000 501,900 S S 55.900 S 48,000 120.675 6,800 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 52.750 154,250 0 119,425 501,900 S S 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 S 0 S 0
