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 $ 657,500 Cost of goods sold 300,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Loss on sale of equipment 357,500 $ 147,400 35,750 183,150 (20,125) Income before taxes Income taxes expense Net income FORTEN COMPANY Comparative Balance Sheets December 31 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 154,225 45,250 $ 108,975 Current Year Prior Year $ 72,400 88,420 298,156 $ 88,500 65,625 266,800 1,360 2,195 460,336 423,120 123,000 142,500 (44,125) $ 558,711 $ 68,141 72,000 (53,500) $ 492,620 $ 137,175 72,750 209,925 140,141 185,250 60,000 173,320 $ 558,711 165,250 0 117,445 $ 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 notes payable for the balance. d. Paid $52,125 cash to reduce the long-term notes payable. e. Issued 4,000 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $53,100. Problem 12-3A (Algo) 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: 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.) Cash flows from operating activities Net income 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 Depreciation expense Increase in accounts payable 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 $ 0 0 0 $ 0 $ 0