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 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Loss on sale of equipment $ 677,500 304,000 373,500 $151,400 39,750 191,150 (24,125) Income before taxes Income taxes expense Net income FORTEN COMPANY Comparative Balance Sheets December 31 158,225 50,850 $107,375 Current Year Prior Year Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable 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 $ 78,400 94,460 $ 92,500 69,625 270,800 304,156 1,400 2,275 478,416 435,200 138,500 (46,125) $ 570,791 $ 72,141 71,200 143,341 191,250 66,000 170,200 $ 570,791 127,000 (55,500) $ 506,700 $ 143,175 77,550 220,725 169,250 116,725 $ 506,700 12 Equity Common stock, $5 par value 191,250 169,250 Paid-in capital in excess of par, common stock 66,000 Retained earnings 170,200 116,725 Total liabilities and equity $570,791 $ 506,700 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $24,125 (details in b). b. Sold equipment costing $103,875, with accumulated depreciation of $49,125, for $30,625 cash. c. Purchased equipment costing $115,375 by paying $68,000 cash and signing a long-term notes payable for the balance. d. Paid $53,725 cash to reduce the long-term notes payable. e. Issued 4,400 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $53,900. 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.) Cash flows from operating activities Net income FORTEN COMPANY. Statement of Cash Flows For Current Year Ended December 31 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash $ 107,375 mole WILLI O ITS SIGHT Required information Cash flows from operating activities Statement of Cash Flows For Current Year Ended December 31 Net income Adjustments to reconcile net income to net cash provided by operations Income statement items not affecting cash Depreciation expense Loss on disposal of equipment Changes in current assets and current liabilities Increase in accounts receivable Increase in inventory Decrease in accounts payable Decrease in prepaid expenses Cash flows from investing activities Cash paid for equipment Cash flows from financing activities Cash paid for dividends Cash received from issuing stock $ 107,375 $ 107,375 0 Net increase (decrease) in cash $ 107,375 Cash balance at December 31, prior year Cash balance at December 31, current year $ 107,375 Type here to search 0 B