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 receipts 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 $ 54,400 70,310 280,156 1,280 406, 146 154,500 (38,125) $522,521 $ 76,500 53,625 254,800 2,005 386,930 111,000 (47,500) $ 450, 430 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 $ 56,141 10,900 67,041 63,500 130,541 $119,175 6,600 125,775 51,750 177,525 168,750 40,500 182,730 $ 522,521 153,250 0 119, 655 $450,430 $597,500 288,000 309,500 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 23,750 other expenses 135,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 159, 150 (8,125) 142,225 28,450 $113,775 Problem 12-4AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4 Additional Information on Year 2017 Transactions a. Net income was $113,775. b. Accounts receivable increased. C. Inventory increased d. Prepaid expenses decreased. e. Accounts payable decreased. f. Depreciation expense was $23,750. g. Sold equipment costing $55,875, with accumulated depreciation of $33,125, for $14,625 cash. This yielded a loss of $8,125. h. Purchased equipment costing $99,375 by paying $36,000 cash and (i.) by signing a long-term note payable for the balance. i. Borrowed $4,300 cash by signing a short-term note payable. j. Paid $51,625 cash to reduce the long-term notes payable. k. Issued 2,800 shares of common stock for $20 cash per share. 1. Declared and paid cash dividends of $50,700. Required: Prepare a complete statement of cash flows using a spreadsheet; report its operating activities using the indirect method (Enter all amounts as positive values.) FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Year Ended December 31, 2017 Analysis of Changes December 31, 2016 Debit Credit December 31, 2017 Balance sheetdebit Cash $ 76,500 $ 54.400 Accounts receivable Inventory Prepaid expenses Equipment 53,625 254,800 2,005 111,000 $ 497,930 54.400 $ Balance sheet-credit Accumulated depreciation Equipment Accounts payable Short-term notes payable Long-term notes payable Common stock, $5 par value Paid-in capital in excess of par value, common stock Retained earnings 47,500 119,175 6,600 51.750 153,250 0 119,655 $ 497.930 Statement of cash flows Operating activities Investing activities Financing activities Non cash investing and financing activities Purchase of equipment financed by long-term note payable $ 0 $ 0