Required: Prepare a complete statement of cash flows using the direct method. (Amounts to be deducted should be indicated with a min sign.) FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities -Cash paid for inventory Cash received from customers Cash paid for operating expenses Cash paid for income taxes Net cash provided by operating activities Cash flows from investing activities Cash received from sale of equipment Cash paid for equipment Net cash used in investing activities Cash flows from financing activities Cash paid for dividends Cash paid on long-term notes Cash received from issuing stock Net cash used in financing activities Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0 0 $ 0 $ 0 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income $ 622,500 293,000 329,500 $ 140,400 28,750 169,150 (13,125) 147,225 35,450 $111,775 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 61,900 77,850 287,656 $ 81,500 58,625 259,800 1,290 2,055 428,696 401,980 149,500 Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable 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 Additional Information on Current Year Transactions (40,625) 116,000 (50,000) $ 467,980 $ 126,675 64,350 $ 537,571 $ 61,141 73,400 134,541 191,025 174,750 158,250 49,500 178,780 118,705 $ 537,571 $ 467,980 a. The loss on the cash sale of equipment was $13,125 (details in b). b. Sold equipment costing $70,875, with accumulated depreciation of $38,125, for $19,625 cash. c. Purchased equipment costing $104,375 by paying $46,000 cash and signing a long-term notes payable for the balance.