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) $ 149,400. Depreciation expense Other gains (losses) $ 667,500 302,000 365,500 37,750 187,150 Loss on sale of equipment (22,125) Income before taxes. Income taxes expense Net income Assets Cash Accounts receivable Inventory 156,225 48,050 $ 108,175 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year. $ 75,400 91,440 301,156 1300 $ 90,500 67,625 268,800 7336 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 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 75,400 91,440 301,156 1,380 469,376 140,500 (45,125) $ 564,751 $ 90,500 67,625 268,800 2,235 429,160 125,000 (54,500) $ 499,660 $ 140,175 75,150 215,325 $ 70,141 71,600 141,741 188,250 167,250 63,000 171,760 117,085 $ 499,66 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 $564,751 a. The loss on the cash sale of equipment was $22,125 (details in b). b. Sold equipment costing $97,875, with accumulated depreciation of $47,125, for $28,625 cash. c. Purchased equipment costing $113,375 by paying $64,000 cash and signing a long-term notes payable for the balance. d. Paid $52,925 cash to reduce the long-term notes payable. e. Issued 4,200 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $53,500. Required information 1. Prepare a complete statement of cash flows using the indirect method for the current year. Note: Amounts to be deducted should be indicated with a minus sign. Cash flows from operating activities FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current assets and current liabilities Cash flows from investing activities + Required information Changes in current assets and current liabilities 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