Required: Prepare a complete statement of cash flows using the direct method. Note: Amounts to be deducted should be Indicated with a minus sign. FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Cash received from customers Cach paid for inventory Cash paid for operating expenses Cash paid for income taxes Net cash provided by operating activities Cash flows from investing activities Bash paid for equipment 0 Cash flows from financing activities Cach received from sale of equipment Net increase (decrease) in cash 0 Cash balance at December 31, prior year Cash balance at December 31, current yearRequired Information 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 085' 439 $ Cost of goods sold 382, 888 Gross profit 365,580 Operating expenses (excluding depreciation) $ 149, 480 Depreciation expense 37, 758 187, 158 Other gains (losses) Loss on sale of equipment (22, 125) Income before taxes 156, 225 Income taxes expense 48,858 Net income $ 188, 175 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 75,480 $ 98, 508 Accounts receivable 91, 448 67, 625 Inventory 381, 156 268, 208 Prepaid expenses 1, 388 2, 235 Total current assets 469,376 429, 168 Equipment 148, 580 125, 838 Accumulated depreciation Equipment (45,125) Total assets $ 564, 751 $ 499, 658 Liabilities and Equity Accounts payable $ 78, 141 $ 148, 175 Long-term notes payable 71, 6BE 75 , 158 Total liabilities 141, 741 215, 325 Equity Common stock, $5 par value 188, 258 167,258 Paid-in capital in excess of par, common stock 63 , 080 E Retained earnings 171, 768 117, 885 Total liabilities and equity $ 564, 751 $ 499, 668 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $22125 (details in b). b. Sold equipment costing $97,875, with accumulated depreciation of $47,125, for $28,625 cash. c. Purchased equipment costing $113,375 by paying $64,000 cash and signing a long-term notes payable for the balance. d. Paid $52,925 cash to reduce the long-term notes payable. e. Issued 4,200 shores of common stock for $20 cash per share. f. Declared and paid cash dividends of $53,500
