Question

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 $ 66,400 $ 84,500 Accounts receivable 82,380 61,625 Inventory 292,156 262,800 Prepaid expenses 1,320 2,115 Total current assets 442,256 411,040 Equipment 146,500 119,000 Accum. depreciation—Equipment (42,125 ) (51,500 ) Total assets $ 546,631 $ 478,540 Liabilities and Equity Accounts payable $ 64,141 $ 131,175 Short-term notes payable 13,300 8,200 Total current liabilities 77,441 139,375 Long-term notes payable 59,500 59,750 Total liabilities 136,941 199,125 Equity Common stock, $5 par value 179,250 161,250 Paid-in capital in excess of par, common stock 54,000 0 Retained earnings 176,440 118,165 Total liabilities and equity $ 546,631 $ 478,540 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 637,500 Cost of goods sold 296,000 Gross profit 341,500 Operating expenses Depreciation expense $ 31,750 Other expenses 143,400 175,150 Other gains (losses) Loss on sale of equipment (16,125 ) Income before taxes 150,225 Income taxes expense 39,650 Net income $ 110,575 Additional Information on Current Year Transactions The loss on the cash sale of equipment was $16,125 (details in b). Sold equipment costing $79,875, with accumulated depreciation of $41,125, for $22,625 cash. Purchased equipment costing $107,375 by paying $52,000 cash and signing a long-term note payable for the balance. Borrowed $5,100 cash by signing a short-term note payable. Paid $55,625 cash to reduce the long-term notes payable. Issued 3,600 shares of common stock for $20 cash per share. Declared and paid cash dividends of $52,300. Required:

Prepare a complete statement of cash flows using a spreadsheet using the indirect method. (Enter all amounts as positive values.)

Answer 1