(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, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 73,900 $ 89,500 Accounts receivable 89,930 66,625 Inventory 299,656 267,800 Prepaid expenses 1,370 2,215 Total current assets 464,856 426,140 Equipment 141,500 124,000 Accum. depreciation Equipment (44,625) (54,000) Total assets $ 561,731 $ 496,140 Liabilities and Equity Accounts payable $ 69,141 $ 138,675 Short-term notes payable 14,800 9,200 Total current liabilities 83,941 147,875 Long-term notes payable 57,000 64,750 Total liabilities 140, 941 212,625 Equity Common stock, $5 par value 186,750 166,250 Paid-in capital in excess of par, common stock 61,500 Retained earnings 172,540 117,265 Total liabilities and equity $ 561,731 $ 496,140 Total liabilities and equity $ 561,731 $ 496,140 $ 662,500 301,000 361,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $36,750 Other expenses 148,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 185, 150 (21,125) 155, 225 46,650 $ 108,575 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $21,125 (details in b). b. Sold equipment costing $94,875, with accumulated depreciation of $46,125, for $27.625 cash. c. Purchased equipment costing $112,375 by paying $62,000 cash and signing a long-term note payable for the balance. d. Borrowed $5.500 cash by signing a short-term note payable. e. Paid $58,125 cash to reduce the long-term notes payable. f. Issued 4.100 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,300. Required: 1. Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to be deducted shou indicated with a minus sign.) FOR TEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations Cash flows from investing activities Cash flows from financing activities
