Required information

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

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 COMPANYIncome StatementFor Current Year Ended December 31Sales$ 657,500Cost of goods sold300,000Gross profit357,500Operating expenses (excluding depreciation)$ 147,400Depreciation expense35,750183,150Other gains (losses)Loss on sale of equipment(20,125)Income before taxes154,225Income taxes expense45,250Net income$ 108,975FORTEN COMPANYComparative Balance SheetsDecember 31Current YearPrior YearAssetsCash$ 72,400$ 88,500Accounts receivable88,42065,625Inventory298,156266,800Prepaid expenses1,3602,195Total current assets460,336423,120Equipment142,500123,000Accumulated depreciationEquipment(44,125)(53,500)Total assets$ 558,711$ 492,620Liabilities and EquityAccounts payable$ 68,141$ 137,175Long-term notes payable72,00072,750Total liabilities140,141209,925EquityCommon stock, $5 par value185,250165,250Paid-in capital in excess of par, common stock60,0000Retained earnings173,320117,445Total liabilities and equity$ 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 notes payable for the balance.
4. Paid $52,125 cash to reduce the long-term notes payable.
5. Issued 4,000 shares of common stock for $20 cash per share.
6. Declared and paid cash dividends of $53,100.

Problem 16-3A (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.

Note: Amounts to be deducted should be indicated with a minus sign.