The Statement of Cash Flow

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 incomestatement and balance sheets follow.

FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales $582,500 Cost of goods sold _2_8,5,M Gross profit 297,500 Operating expenses Depreciation expense $ 20,750 Other expenses 132% 153,150 Other gains (losses) Loss on sale of equipment (5,125) Income before taxes 139,225 Income taxes expense 24,250 Net income $1 14,975 Comparative Balance Sheets December 31, 2017 and 2016 2017 Assets Cash $ 49,800 Accounts receivable 65,810 Inventory 275,656 Prepaid expenses _l_,_2_50 Total current assets 392,5 16 Equipment 157,500 Accum. depreciationEquipment _(,@) Total assets $513,391 Liabilities and Equity Accounts payable $ 53,141 Short-term notes payable J,M Total current liabilities 63,141 Long-term notes payable j,@ Total liabilities 128,141 Equity Common stock, $5 par value 162,750 Paid-in capital in excess of par, common stock 37,500 Retained earnings ,@ Total liabilities and equity $5 13,391 2016 $ 73,500 50,625 251,800 _1, 377,800 108,000 _(4E,@) $439,800 $1 14,675 41% 120,675 A,m 169,425 150,250 0 m,g $439,800 Case study Rubric Presents the correct amount of cash by operating activities 0.0 pts No Marks Demonstrates knowledge and understanding of content and applicability to prepare statement 0.0 pts of cash ow by using indirect method No Marks The entire worksheet is correctly prepared with no major errors' Presents the correct amount of cash by investing activities Presents the correct amount of cash by nancing activities Provides the net changes in cash 2.0 pts Total Points: 20.0