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 CONTRANY Income Statement For Current Year Ended December 31 Sales $ 667,500 Cost of goods sold 382,000 Gross profit 365,500 Operating expenses (excluding depreciation) $ 149,400 Depreciation expense 37,75e 187,150 Other gains (losses) Loss on sale of equipment (22,125) Income before taxes 156,225 Income taxes expense 48,050 $ 188,175 Net income 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 67,625 268,880 2,235 429,160 125,000 (54,500) $ 499,660 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities 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 $ 79,141 15,100 85,241 56,500 141, 741 $ 140, 175 9,400 149,575 65,750 215,325 188,250 63,000 171,760 $ 564,751 167,250 @ 117,085 $ 499,660 Additional Information on Current Year Transactions n. The loss on the cash sale of equipment wps $22.125 (details in o) b. Sold equipment costing $97,875, with accumulated depreciation of $42125 for $28,625 cash c. Purchased equipment costing $113,375 by paying $64,000 cash and signing a long-term note payable for the balance. d. Borrowed $5.700 cash by signing a short-term note payable. e. Paid $58,625 cash to reduce the long-term notes payable. f. Issued 4 200 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,500, 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.) Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Net income $ 108,175 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Depreciation expense 22.125 X Increase in accounts receivable 37,750 X Changes in current assets and current liabilities Increase in inventory (23,815) X Decrease in prepaid expenses (32,356) Decrease in accounts payable 855 X Loss on disposal of equipment X (70,034) X ol $ 42,700 Cash flows from investing activities Cash paid for equipment Cash received from sale of equipment 28,625 (64,000) X (35,375) Cash flows from financing activities: Cash received from issuing stock Cash paid for dividends Cash paid on long-term note Cash paid for dividends >>>X 84,000 (53,500) 5,700 X (58.625) x Decrease in prepaid expenses Decrease in accounts payable Loss on disposal of equipment (32,356) > 855 X (70,034) 42,700 Cash flows from investing activities Cash paid for equipment Cash received from sale of equipment 28,625 X (64,000) (35,375) Cash flows from financing activities: Cash received from issuing stock Cash paid for dividends Cash paid on long-term note Cash paid for dividends 84,000 (53,500) 5,700 (58,625) X Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year (22,425) $ (15,100) 90,500 $ 75,400