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Use the following information for the Problems below. Skip to question [The following information applies to the questions displayed below.] Forten Company's current year income

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[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, (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.

FORTEN COMPANY Comparative Balance Sheets December 31
Current Year Prior Year
Assets
Cash $ 61,900 $ 81,500
Accounts receivable 77,850 58,625
Inventory 287,656 259,800
Prepaid expenses 1,290 2,055
Total current assets 428,696 401,980
Equipment 149,500 116,000
Accum. depreciationEquipment (40,625 ) (50,000 )
Total assets $ 537,571 $ 467,980
Liabilities and Equity
Accounts payable $ 61,141 $ 126,675
Short-term notes payable 12,400 7,600
Total current liabilities 73,541 134,275
Long-term notes payable 61,000 56,750
Total liabilities 134,541 191,025
Equity
Common stock, $5 par value 174,750 158,250
Paid-in capital in excess of par, common stock 49,500 0
Retained earnings 178,780 118,705
Total liabilities and equity $ 537,571 $ 467,980

FORTEN COMPANY Income Statement For Current Year Ended December 31
Sales $ 622,500
Cost of goods sold 293,000
Gross profit 329,500
Operating expenses
Depreciation expense $ 28,750
Other expenses 140,400 169,150
Other gains (losses)
Loss on sale of equipment (13,125 )
Income before taxes 147,225
Income taxes expense 35,450
Net income $ 111,775

Additional Information on Current Year Transactions

  1. The loss on the cash sale of equipment was $13,125 (details in b).
  2. Sold equipment costing $70,875, with accumulated depreciation of $38,125, for $19,625 cash.
  3. Purchased equipment costing $104,375 by paying $46,000 cash and signing a long-term note payable for the balance.
  4. Borrowed $4,800 cash by signing a short-term note payable.
  5. Paid $54,125 cash to reduce the long-term notes payable.
  6. Issued 3,300 shares of common stock for $20 cash per share.
  7. Declared and paid cash dividends of $51,700.

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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: $ 0 Cash flows from investing activities 0 Cash flows from financing activities: 0 0 Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year 0 Required: Prepare a complete statement of cash flows using the direct method. (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 $ 0 Cash flows from investing activities 0 Cash flows from financing activities Cash flows trom Tinancing activities 0 $ 0 Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year O

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