Return 29 Required information 3.33 points Use the following information for the Problems below. (Algo) (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. $647,500 298,000 349,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $145,400 Depreciation expense 33,750 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 179, 150 (18,125) 152,225 42,450 $ 109,775 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment $ 69,400 85,400 295, 156 1,340 451,296 144,500 (43, 125) CEE $ 86,500 63,625 264,800 2,155 417,080 121,000 (52,500) + 4 0 29 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year 3.33 points $ 69,400 85,400 295, 156 1,340 451,296 144,500 (43,125) $552,671 $ 86,500 63,625 264,800 2, 155 417,080 121,000 (52,500) $ 485,580 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment met 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 $ 66,141 13,900 80,041 58,500 138,541 $134,175 8,600 142, 775 61,750 204,525 182,250 57,000 174,880 $552,671 163, 250 0 117,805 $ 485,580 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $18,125 (details 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 paying $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. Paid $56,625 cash to reduce the long-term notes payable. f. Issued 3,800 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $52,700. 29 Required information Answer is not complete. 3.33 points FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Net income $ 109,775 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Loss on disposal of equipment 18,125 Depreciation expense Changes in current assets and current liabilities Increase in accounts receivable Decrease in prepaid expenses Increase in inventory Decrease in accounts payable $ 127,900 Net cash provided by operating activities Cash flows from investing activities Cash paid for equipment Cash received from sale of equipment 0 Net cash used in investing activities Cash flows from financing activities: Cash borrowed on short-term note Cash paid on long-term note Cash received from issuing stock 29 Required information .33 oints Net income $ 109,775 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Loss on disposal of equipment 18,125 Depreciation expense Changes in current assets and current liabilities Increase in accounts receivable Decrease in prepaid expenses Increase in inventory Decrease in accounts payable $ 127,900 Net cash provided by operating activities Cash flows from investing activities Cash paid for equipment Cash received from sale of equipment 0 Net cash used in investing activities Cash flows from financing activities: Cash borrowed on short-term note Cash paid on long-term note Cash received from issuing stock Cash paid for dividends 0 $ 127,900 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 $ 127,900