Required information Use the following information for the Problems below. (The following information applies to the questions displayed below.] Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash eceipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's income statement and balance sheets follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment $ 79,500 56,625 257,800 2,015 395,940 114, 000 (49,000) $460,940 $ 58,900 74,830 284,656 1,270 419,656 151,500 (39,625) Total assets $531,531 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 $ 59,141 11,800 70,941 62,000 132,941 $123,675 7,200 130,875 54, 750 185,625 174,750 43,500 180,340 $531,531 156, 250 119,065 $460,940 Total liabilities and equity FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales $612,500 291,000 321,500 Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense $ 26,750 138,400 165,150 (11,125) 145, 225 32,650 Net income $112,575 Problem 12-3A Indirect: Statement of cash flows LO A1, P1, P2, P3 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $11,125 (details in b). b. Sold equipment costing $64,875, with accumulated depreciation of $36,125, for $17,625 cash. c. Purchased equipment costing $102,375 by paying $42,000 cash and signing a long-term note payable for the balance, d. Borrowed $4,600 cash by signing a short-term note payable. e. Paid $53,125 cash to reduce the long-term notes payable. f. Issued 3,100 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $51,300. Required: 1. Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Required: 1. Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities 112,575 Net income %24 Adjustments to reconcile net income to net cash provided by operations: 26,750 Depreciation expense Accounts receivable increase AARAAAAAAAAAA Inventory increase Prepaid expense decrease Accounts payable decrease Loss on disposal of equipment Net cash provided by operating activities 139,325 Cash flows from investing activities Cash received from sale of equipment Cash received from sale of equipment Cash paid for equipment Net cash used in investing activities Cash flows from financing activities: Cash borrowed on short-term note Cash paid on long-term note Cash received from issuing stock Ceeh naid for diuidande Adjustments to reconcile net income to net cash provided by operations: 26,750 Depreciation expense Accounts receivable increase Inventory increase Prepaid expense decrease Accounts payable decrease Loss on disposal of equipment 139,325 Net cash provided by operating activities Cash flows from investing activities Cash received from sale of equipment Cash received from sale of equipment Cash paid for equipment Net cash used in investing activities Cash flows from financing activities: Cash borrowed on short-term note Cash paid on long-term note Cash received from issuing stock Cash paid for dividends Net cash used in financing activities Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year 139,325 139,325