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

AssetsCash $ 51,400 $74,500

Accounts receivable 67,310 51,625

Inventory 277,156 252,800

Prepaid expenses 1,300 2,025

Total current assets 397,166 380,950

Equipment 156,500 109,000

Accum. depreciationEquipment (37,125) (46,500)

Total assets $516,541 $443,450

Liabilities and Equity

Accounts payable $54,141 $116,175

Short-term notes payable 10,300 6,200

Total current liabilities 64,441 122,375

Long-term notes payable 64,500 49,750

Total liabilities 128,941 172,125

Equity

Common stock, $5 par value 164,750 151,250

Paid-in capital in excess of par, common stock38,500 0

Retained earnings 184,350 120,075

Total liabilities and equity $516,541 $443,450

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FORTEN COMPANY

Income Statement

For Year Ended December 31, 2017

Sales $ 587,500

Cost of goods sold 286,000

Gross profit 301,500

Operating expenses

Depreciation expense $ 21,750

Other expenses 133,400 155,150

Other gains (losses)

Loss on sale of equipment (6,125 )

Income before taxes 140,225

Income taxes expense 25,650

Net income $ 114,575

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Additional Information on Year 2017 Transactions

1. The loss on the cash sale of equipment was $6,125 (details in b).
2. Sold equipment costing $49,875, with accumulated depreciation of $31,125, for $12,625 cash.
3. Purchased equipment costing $97,375 by paying $32,000 cash and signing a long-term note payable for the balance.
4. Borrowed $4,100 cash by signing a short-term note payable.
5. Paid $50,625 cash to reduce the long-term notes payable.
6. Issued 2,600 shares of common stock for $20 cash per share.
7. Declared and paid cash dividends of $50,300.

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Required:

complete statement of cash flows; report its operating activities according to the direct 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

$0

Cash flows from investing activities

0

Cash flows from financing activities

0

Net increase (decrease) in cash

$0

Net increase (decrease) in cash

Cash balance at beginning of year

Cash balance at end of year

$0

*all options to input

Cash borrowed on short-term note

Cash paid for dividends

Cash paid for equipment

Cash paid for income taxes

Cash paid for inventory

Cash paid for other expenses

Cash paid on long-term note

Cash received from customers

Cash received from issuing stock

Cash received from sale of equipment

Decrease in accounts payable

Decrease in accounts receivable

Decrease in merchandise inventory

Decrease in prepaid expenses

Depreciation expense

Increase in accounts payable

Increase in accounts receivable

Increase in merchandise inventory

Increase in prepaid expenses

Loss on sale of equipment

Net income

Net cash provided by financing activities

• Net cash provided by investing activities
• Net cash provided by operating activities
• Net cash used in financing activities

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