Question
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
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 $602,500
Cost of goods sold 289,000
Gross profit 313,500
Operating expenses (excluding depreciation) $136,400
Depreciation expense 24,750161,150
Other gains (losses)
Loss on sale of equipment (9,125)
Income before taxes 143,225
Income taxes expense 29,850
Net income $113,375
FORTEN COMPANY
Comparative Balance Sheets
December 31
Current Year Prior Year.
Assets
Cash $55,900 $77,500
Accounts receivable 71,810 54,625
Inventory 281,656 255,800
Prepaid expenses 1,250 1,975
Total current assets 410,616 389,900
Equipment 153,500 112,000
Accum. depreciationEquipment (38,625) (48,000)
Total assets $525,491 $453,900
Liabilities and Equity
Accounts payable $57,141 $120,675
Short-term notes payable 11,200 6,800
Total current liabilities 68,341 127,475
Long-term notes payable 63,000 52,750
Total liabilities 131,341 180,225
Equity
Common stock, $5 par value 168,750 154,250
Paid-in capital in excess of par, common stock 43,500 0
Retained earnings 181,900 119,425
Total liabilities and equity $525,491 $453,900
Additional Information on Current Year Transactions
- The loss on the cash sale of equipment was $9,125 (details inb).
Sold equipment costing $58,875, with accumulated depreciation of $34,125, for $15,625 cash.
Purchased equipment costing $100,375 by paying $38,000 cash and signing a long-term note payable for the balance.
Borrowed $4,400 cash by signing a short-term note payable.
Paid $52,125 cash to reduce the long-term notes payable.
Issued 2,900 shares of common stock for $20 cash per share.
Declared and paid cash dividends of $50,900.
Problem 12-3A (Algo) Indirect: Statement of cash flows LO A1, P2, P3
Required:
1.Prepare a complete statement of cash flows using theindirect methodfor the current year.(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.
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Adjustments to reconcile net income to net cash provided by operations
Income statement items not affecting cash
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Change in current assets and current liabilities
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Cash flows from investing activities
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Cash flows financing activities
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Net increase (decrease) in cash
Cash balance at December 31, prior year ------------------
Cash balance at December 31, current year -----------------
Problem 13-2A (Algo) Ratios, common-size statements, and trend percents LO P1, P2, P3
[The following information applies to the questions displayed below.]
Selected comparative financial statements of Korbin Company follow.
KORBIN COMPANY
Comparative Balance Sheets
December 31, 2020, 2019, and 2018
2020 2019 2018
Sales $411,187 $315,003 $218,600
Cost of goods sold 247,535 198,137 139,904
Gross profit 163,652 116,866 78,696
Selling expenses 58,389 43,470 28,855
Administrative expenses37,007 27,720 18,144
Total expenses 95,396 71,190 46,999
Income before taxes 68,256 45,676 31,697
Income tax expense 12,696 9,364 6,434
Net income $55,560 $36,312 $25,263
KORBIN COMPANY
Comparative Balance Sheets
December 31, 2020, 2019, and 2018
2020 2019 2018
Assets
Current assets $56,059 $37,520 $50,156
Long-term investments 0 600 4,930
Plant assets, net 107,377 97,646 57,396
Total assets $163,436 $135,766 $112,482
Liabilities and Equity
Current liabilities $23,862 $20,229 $19,684
Common stock 71,000 71,000 53,000
Other paid-in capital 8,875 8,875 5,889
Retained earnings 59,699 35,662 33,909
Total liabilities and equity. $163,436 $135,766 $112,482
Problem 13-2A (Algo) Part 1
Required:
1.Complete the below table to calculate each year's current ratio.
Choose Numerator / Choose Denominator: = Current ratio
---------------------- / ------------------------ = ----------- to 1
2020 ---------------------- / --------------------------- =. --------- to 1
2019 ----------------------- / ----------------------- = --------- to 1
2018------------------- / ---------------------- = ----------- to 1
Problem 13-2A (Algo) Ratios, common-size statements, and trend percents LO P1, P2, P3
[The following information applies to the questions displayed below.]
Selected comparative financial statements of Korbin Company follow.
KORBIN COMPANY
Comparative Income Statements
For Years Ended December 31, 2020, 2019, and 2018
2020 2019 2018
Sales $411,187 $315,003 $218,600
Cost of goods sold 247,535 198,137 139,904
Gross profit 163,652 116,866 78,696
Selling expenses 58,389 43,470 28,855
Administrative expenses 37,007 27,720 18,144
Total expenses 95,396 71,190 46,999
Income before taxes 68,256 45,676 31,697
Income tax expense 12,696 9,364 6,434
Net income $55,560 $36,312 $25,263
KORBIN COMPANY
Comparative Balance Sheets
December 31, 2020, 2019, and 2018
2020 2019 2018
Assets
Current assets $56,059 $37,520 $50,156
Long-term investments 0 600 4,930
Plant assets, net 107,377 97,646 57,396
Total assets $163,436 $135,766 $112,482
Liabilities and Equity
Current liabilities $23,862 $20,229 $19,684
Common stock 71,000 71,000 53,000
Other paid-in capital 8,875 8,875 5,889
Retained earnings 59,699 35,662 33,909
Total liabilities and equity $163,436 $135,766 $112,482
Problem 13-2A (Algo) Part 2
2.Complete the below table to calculate income statement data in common-size percents.(Round your percentage answers to 2 decimal places.)
Korbin Company
Common-Size Comparative Income Statement
For Year Ended December 31, 2020,2019,2018
2020 2019 2018
sale
cost of good sold
gross profit selling expenses
administrative expenses
total expenses
income before taxes
income tax expense
net income
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