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 For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 152,400 Depreciation expense Other gains (losses) $ 682,500 305,000 377,500 40,750 193,150 Loss on sale of equipment Income before taxes (25,125) 159,225 Income taxes expense Net income 52,250 $106,975 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 79,900 95,970 $ 93,500 70,625 271,800 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets. Equipment Accumulated depreciation-Equipment Total assets 305,656 1,410 2,295 482,936 438,220 137,500 128,000 (46,625) (56,000) $573,811 $ 510,220 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 $ 682,500 305,000 377,500 $ 152,400 40,750 193,150 (25,125) Income before taxes Income taxes expense Net income FORTEN COMPANY Comparative Balance Sheets December 31 159,225 52,250 $ 106,975 Current Year Prior Year 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 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 $ 79,900 $93,500 95,970 70,625 305,656 271,800 1,410 2,295 482,936 438,220 137,500 128,000. (46,625) $573,811 (56,000) $ 510,220 $144,675 78,750 223,425 $ 73,141 71,000 144,141 192,750 67,500 169,420 $ 573,811 170,250 116,545 0 $ 510,220 Additional Information on Current Year 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 notes payable for the balance. d. Paid $54,125 cash to reduce the long-term notes payable. e. Issued 4,500 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $54,100. Problem 12-5AB (Algo) Direct: Statement of cash flows LO P5 Required: Prepare a complete statement of cash flows using the direct method. 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 S 03:30:02 Book erences FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities $ 0 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