Required information

Use the following information for the Problems below. (Algo)

Skip to question

[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					357,500
Operating expenses (excluding depreciation)	$	147,400
Depreciation expense		35,750			183,150
Other gains (losses)
Loss on sale of equipment					(20,125	)
Income before taxes					154,225
Income taxes expense					45,250
Net income				$	108,975

FORTEN COMPANY Comparative Balance Sheets December 31
	Current Year						Prior Year
Assets
Cash		$	72,400					$	88,500
Accounts receivable			88,420						65,625
Inventory			298,156						266,800
Prepaid expenses			1,360						2,195
Total current assets			460,336						423,120
Equipment			142,500						123,000
Accum. depreciationEquipment			(44,125	)					(53,500	)
Total assets		$	558,711					$	492,620
Liabilities and Equity
Accounts payable		$	68,141					$	137,175
Short-term notes payable			14,500						9,000
Total current liabilities			82,641						146,175
Long-term notes payable			57,500						63,750
Total liabilities			140,141						209,925
Equity
Common stock, $5 par value			185,250						165,250
Paid-in capital in excess of par, common stock			60,000						0
Retained earnings			173,320						117,445
Total liabilities and equity		$	558,711					$	492,620

Additional Information on Current Year Transactions

1. The loss on the cash sale of equipment was $20,125 (details in b).
2. Sold equipment costing $91,875, with accumulated depreciation of $45,125, for $26,625 cash.
3. Purchased equipment costing $111,375 by paying $60,000 cash and signing a long-term note payable for the balance.
4. Borrowed $5,500 cash by signing a short-term note payable.
5. Paid $57,625 cash to reduce the long-term notes payable.
6. Issued 4,000 shares of common stock for $20 cash per share.
7. 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.)