Use the following information for the Problems 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 Assots Cash 72,400 $ 88,420 298,156 1,360 460,336 142,500 88,500 65,625 266,800 2,195 Accounts receivable Inventory Prepaid expenses Total current assets 423,120 123,000 (53,500) Equipment Accum. depreciation-Equipment (44,125) 550,711 492,620 Total ansets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities $ 68,141 14,500 $ 137,175 9,000 82,641 57,500 146,175 63,750 209,925 Long-term notes payable Total liabilities Equity Common stook, $5 par value Paid-in capital in excess of par, comnon stock Retained earnings 140,141 192,750 52,500 273, 165,250 117,445 558,711 492,620 Total liabilities and equity FORTEN CONPANY Income statement For Year Ended December 31, 2017 s 657.500 300,000 357,500 sales Cost of goods sold Gross profit FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense $ 657,500 300,000 357,500 $35,750 147,400 183,150 (20,125) 154,225 45,250 $108,975 Net income Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $20,125 (details in b). b. Sold equipment costing $91,875, with accumulated depreciation of $45,125, for $26,625 cash. c. Purchased equipment costing $111,375 by paying $60,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,500 cash by signing a short-term note payable. e. Paid $57,625 cash to reduce the long-term notes payable. f. Issued 4,000 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $53,100. Problem 16-3A Indirect: Statement of cash flows LO A1, P1, P2, P3 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. Required information should be indicated with a minus sign.) 2 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 olo