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 $ 647,500 Cost of goods sold 298,000 Gross profit Operating expenses (excluding depreciation) $ 145,400 Depreciation expense Other gains (losses). 349,500 33,750 179,150 (18,125) Loss on sale of equipment Income before taxes Income taxes expense Net income Assets Cash FORTEN COMPANY Comparative Balance Sheets 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 December 31 152,225 42,450 $ 109,775 Current Year Prior Year $ 69,400 85,400 295,156 $ 86,500 63,625 264,800 1,340 2,155 451,296 417,080 144,500 (43,125) $ 552,671 $ 66,141 72,400 138,541 182,250 121,000 (52,500) $ 485,580 $ 134,175 70,350 204,525 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 163,250 57,000 0 174,880 117,805 $ 552,671 $ 485,580 a. The loss on the cash sale of equipment was $18,125 (details in b). b. Sold equipment costing $85,875, with accumulated depreciation of $43,125, for $24,625 cash. c. Purchased equipment costing $109,375 by paying $56,000 cash and signing a long-term notes payable for the balance. d. Paid $51,325 cash to reduce the long-term notes payable. e. Issued 3,800 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $52,700. Problem 16-5AB (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. 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 Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment Cash flows from financing activities Cash paid on long-term notes Cash received from issuing stock Cash paid for dividends Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0 0 0 $ 0 $ 0