Use the following information for the Problems below. (Algo)

Skip to question

[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		$ 607,500
Cost of goods sold		290,000
Gross profit		317,500
Operating expenses (excluding depreciation)	$ 137,400
Depreciation expense	25,750	163,150
Other gains (losses)
Loss on sale of equipment		(10,125)
Income before taxes		144,225
Income taxes expense		31,250
Net income		$ 112,975

FORTEN COMPANY
Comparative Balance Sheets
December 31
	Current Year	Prior Year
Assets
Cash	$ 57,400	$ 78,500
Accounts receivable	73,320	55,625
Inventory	283,156	256,800
Prepaid expenses	1,260	1,995
Total current assets	415,136	392,920
Equipment	152,500	113,000
Accumulated depreciationEquipment	(39,125)	(48,500)
Total assets	$ 528,511	$ 457,420
Liabilities and Equity
Accounts payable	$ 58,141	$ 122,175
Long-term notes payable	74,000	60,750
Total liabilities	132,141	182,925
Equity
Common stock, $5 par value	170,250	155,250
Paid-in capital in excess of par, common stock	45,000	0
Retained earnings	181,120	119,245
Total liabilities and equity	$ 528,511	$ 457,420

Additional Information on Current Year Transactions

1. The loss on the cash sale of equipment was $10,125 (details in b).
2. Sold equipment costing $61,875, with accumulated depreciation of $35,125, for $16,625 cash.
3. Purchased equipment costing $101,375 by paying $40,000 cash and signing a long-term notes payable for the balance.
4. Paid $48,125 cash to reduce the long-term notes payable.
5. Issued 3,000 shares of common stock for $20 cash per share.
6. Declared and paid cash dividends of $51,100.

Problem 16-4AA (Algo) Indirect: Cash flows spreadsheet LO P4

Required:

Prepare a complete statement of cash flows using a spreadsheet using the indirect method.

Prepare a complete statement of cash flows using the direct method.