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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 $ $667,500$

Cost of goods sold $302,000$

Gross profit $365,500$

Operating expenses $($excluding depreciation$)$ $ $149,400$

Depreciation expense $37,750187,150$

Other gains $($losses$)$

Loss on sale of equipment $(22,125)$

Income before taxes $156,225$

Income taxes expense $48,050$

Net income $ $108,175$

FORTEN COMPANY

Comparative Balance Sheets

December $31$

Current Year Prior Year

Assets

Cash $ $75,400$ $ $90,500$

Accounts receivable $91,44067,625$

Inventory $301,156268,800$

Prepaid expenses $1,3802,235$

Total current assets $469,376429,160$

Equipment $140,500125,000$

Accumulated depreciation$$Equipment $(45,125)(54,500)$

Total assets $ $564,751$ $ $499,660$

Liabilities and Equity

Accounts payable $ $70,141$ $ $140,175$

Long$-$term notes payable $71,60075,150$

Total liabilities $141,741215,325$

Equity

Common stock, $$5$ par value $188,250167,250$

Paid$-$in capital in excess of par, common stock $63,0000$

Retained earnings $171,760117,085$

Total liabilities and equity $ $564,751$ $ $499,660$

Additional Information on Current Year Transactions

The loss on the cash sale of equipment was $$22,125($details in b$).$

Sold equipment costing $$97,875,$ with accumulated depreciation of $$47,125,$ for $$28,625$ cash.

Purchased equipment costing $$113,375$ by paying $$64,000$ cash and signing a long$-$term notes payable for the balance.

Paid $$52,925$ cash to reduce the long$-$term notes payable.

Issued $4,200$ shares of common stock for $$20$ cash per share.

Declared and paid cash dividends of $$53,500.$

Problem $16-5$AB $($Algo$)$ Direct: Statement of cash flows LO P$5$

Required:

Prepare a complete statement of cash flows using the direct method.

Note: Amounts to be deducted should be indicated with a minus sign.