Use the following information for the Problems below.

[The following information applies to the questions displayed 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 companys income statement and balance sheets follow.

Problem 12-3A Indirect: Statement of cash flows LO A1, P1, P2, P3

Additional Information on Year 2017 Transactions

The loss on the cash sale of equipment was $22,125 (details in b).

Sold equipment costing $97,875, with accumulated depreciation of $47,125, for $28,625 cash.

Purchased equipment costing $113,375 by paying $64,000 cash and signing a long-term note payable for the balance.

Borrowed $5,700 cash by signing a short-term note payable.

Paid $58,625 cash to reduce the long-term notes payable.

Issued 4,200 shares of common stock for $20 cash per share.

Declared and paid cash dividends of $53,500.

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.)

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FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $ 75,400 $ 90,500 67,625 268, 800 2,235 429,160 125,000 91,440 301,156 1,380 469, 376 140, 500 (45,125 54, 500) $564,751 $499,660 Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities 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 $ 70,141 $140,175 9,400 149,575 65,750 215, 325 15,100 85,241 56,500 141,741 196,750 54,500 171,760 167,250 117,085 $564,751 499,660 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $667,50e 302,000 365, 500 Depreciation expense $37,75e 149,400 Other expenses Other gains (losses) 187,150 Loss on sale of equipment Income before taxes Income taxes expense Net income (22,125) 156, 225 48,050 $ 108,175 Answer is not complete. FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Net income S (156,225) Adjustments to reconcile net income to net cash provided by operations $ (156,225) Cash flows from investing activities Cash received from sale of equipment 28,625 Cash paid for equipment (64,000) (35,375) Cash flows from financing activities Notes payable long-term decrease Cash paid for dividends Cash borrowed on short-term note Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of vear $ (191,600) $ (191,600)