Use the following information for the problems below. (Aigo) [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 Sales For Current Year Ended December 31 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income Assets 597,500 288,000 309,500 $ 135,400 23,750 159,150 (8,125) 142,225 28,450 113,775 FORTEN COMPANY Comparative Balance Sheets Cash Accounts receivable Inventory Prepaid expenses December 31 Current Year Prior Year $ $ 54,400 76,500 70,310 53,625 280,156 254,800 1,280 2,005 406,146 386,930 Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity 154,500 111,000 (38,125) (47,500) 522,521 450,430 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 Additional Information on Current Year Transactions $ 56,141 119,175 74,400 58,350 130,541 177,525 167,250 153,250 42,000 0 182,730 119,655 522,521 $ 522,521 450,430 a. The loss on the cash sale of equipment was $8,125 (details in b). b. Sold equipment costing $55,875, with accumulated depreciation of $33,125, for $14,625 cash. c. Purchased equipment costing $99,375 by paying $36,000 cash and signing a long-term notes payable for the balance. d. Paid $47,325 cash to reduce the long-term notes payable. e. Issued 2,800 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50,700. Problem 12-3A (Algo) Indirect: Statement of cash flows LO A1, P2, P3 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.) FORTEN 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: Income statement items not affecting cash Changes in current assets and current liabilities Cash flows from investing activities Cash flows from financing activities: Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year