Requlred Information Use the following information for the Problems below. [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 Recelvable reflect cash recelpts from customers, (3) all purchases of Inventory are on credit, (4) all deblts to Accounts Payable reflect cash payments for Inventory, and (5) Other Expenses are pald Iin advance and are Initlally debited to Prepald Expenses. FORTEN COMPANY Comparative Balance Sheets December 31 Prior Year Current Year Assets $ 69,400 85,400 $ 86, 500 63,625 264,800 2,155 Cash Accounts receivable Inventory Prepaid expenses 295,156 1,340 Total current assets 451, 296 417,880 121,000 (52,500) Equipment Accum. depreciation-Equipment 144, 500 (43,125) $ 552,671 $ 485,580 Total assets Liabilities and Equity Accounts payable Short-term notes payable $ 134,175 8, 600 $ 66,141 13,900 Total current liabilities 80,841 142,775 Long-term notes payable 58,500 61,750 Total liabilities 204,525 138,541 Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings 182,250 57,000 174,88e 163, 250 117,805 $ 552,671 $ 485, 580 Total liabilities and equity FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 647,500 Cost of goods sold 298, e00 Gross profit Operating expenses Depreciation expense Other expenses 349, 500 $ 33,750 145,400 179,150 Other gains (losses) Loss on sale of equipment (18,125) Income before taxes 152,225 Income taxes expense 42,450 $ 189,775 Net income Additional Information on Current Year Transactions Additlonal Information on Current Year Transactions a. The loss on the cash sale of equipment was $18,125 (detals In b). b. Sold equipment costing $85,875, with accumulated depreciation of $43,125, for $24,625 cash. c. Purchased equipment costing $109,375 by paylng $56,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,300 cash by signing a short-term note payable. e. Pald $56,625 cash to reduce the long-term notes payable. f. Issued 3,8000 shares of common stock for $20 cash per share. g. Declared and pald cash dividends of $52,700. Problem 12-3A 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. (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 Net income Adjustments to reconcile net income to net cash provided by operations: Depreciation expense Loss on disposal of equipment Accounts receivable increase Inventory increase Prepaid expense decrease Accounts payable decrease Net cash provided by investing activities Cash flows from investing activities Cash flows from financing activities: Net increase (decrease) in cash Cash balance at December 31. prior year Cash balance at December 31, current year
