[The following information applies to the questions displayed below.] Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. 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. The company's income statement and balance sheets follow FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash $ 57,400 78,500 55,625 256,80 1,995 Accounts receivable 73,320 Inventory Prepaid expenses Total current assets 283,156 1,260 415,136 152,500 39,125 392,920 113,000 5 (48,500) Equipment Accum. depreciation-Equipment 528,511 $ 457,420 Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities 58,141 122,175 11,50008 7,000 69,641 62,500 129,175 53,750 Long-term notes payable Total liabilities 132,141 182,925 Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings 172,750 42,500 181,128 155, 250 119,245 $528,511 457,420 Total liabilities and equity FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales 607,500 290,000 Cost of goods sold Gross profit 317,500 Operating expenses Depreciation expense Other expenses Other gains (losses) Loss on sale of equipment $ 25,750 137,408 163,150 10,125 Income before taxes 144,225 31, 250 Income taxes expense 112,975 Net income Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $10,125 (details in b). b. Sold equipment costing $61,875, with accumulated depreciation of $35,125, for $16,625 cash. c. Purchased equipment costing $101,375 by paying $40,000 cash and signing a long-term note payable for the balance. d. Borrowed $4,500 cash by signing a short-term note payable. e. Paid $52,625 cash to reduce the long-term notes payable. f. Issued 3,000 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $51,100. Required 1. Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Required 1. Prepare a complete statement of cash flows, report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 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 Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year Net income Net loss Accounts payable decrease Accounts payable increase Accounts receivable decrease Accounts receivable increase Cash borrowed on short-term note Cash paid for dividends Cash paid for equipment Cash paid on long-term note Cash received from issuing stock Cash received from sale of equipment Depreciation expense Income taxes payable decrease Income taxes payable increase Inventory decrease Inventory increase Loss on disposal of equipment Notes payable long-term decrease Notes payable long-term increase Prepaid expense decrease Prepaid expense increase Salaries payable decrease Salaries payable increase