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Required information Use the following information for the Problems below. Forten Company, a merchandiser, recently completed...

Required information

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
Assets
Cash $ 78,400 $ 92,500
Accounts receivable 94,460 69,625
Inventory 304,156 270,800
Prepaid expenses 1,400 2,275
Total current assets 478,416 435,200
Equipment 138,500 127,000
Accum. depreciation—Equipment (46,125 ) (55,500 )
Total assets $ 570,791 $ 506,700
Liabilities and Equity
Accounts payable $ 72,141 $ 143,175
Short-term notes payable 15,700 9,800
Total current liabilities 87,841 152,975
Long-term notes payable 55,500 67,750
Total liabilities 143,341 220,725
Equity
Common stock, $5 par value 200,750 169,250
Paid-in capital in excess of par, common stock 56,500 0
Retained earnings 170,200 116,725
Total liabilities and equity $ 570,791 $ 506,700

  

FORTEN COMPANY
Income Statement
For Year Ended December 31, 2017
Sales $ 677,500
Cost of goods sold 304,000
Gross profit 373,500
Operating expenses
Depreciation expense $ 39,750
Other expenses 151,400 191,150
Other gains (losses)
Loss on sale of equipment (24,125 )
Income before taxes 158,225
Income taxes expense 50,850
Net income $ 107,375


Additional Information on Year 2017 Transactions

The loss on the cash sale of equipment was $24,125 (details in b).

Sold equipment costing $103,875, with accumulated depreciation of $49,125, for $30,625 cash.

Purchased equipment costing $115,375 by paying $68,000 cash and signing a long-term note payable for the balance.

Borrowed $5,900 cash by signing a short-term note payable.

Paid $59,625 cash to reduce the long-term notes payable.

Issued 4,400 shares of common stock for $20 cash per share.

Declared and paid cash dividends of $53,900.

Problem 16-4AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4

Required:
Prepare a complete statement of cash flows using a spreadsheet; report its operating activities using the indirect method. (Enter all amounts as positive values.)
  

FORTEN COMPANY
Spreadsheet for Statement of Cash Flows
For Year Ended December 31, 2017
Analysis of Changes
December 31, 2016 Debit Credit December 31, 2017
Balance sheet—debit
Cash $92,500 $78,400
Accounts receivable 69,625
Inventory 270,800
Prepaid expenses 2,275
Equipment 127,000
$562,200 $78,400
Balance sheet—credit
Accumulated depreciation—Equipment $55,500
Accounts payable 143,175
Short-term notes payable 9,800
Long-term notes payable 67,750
Common stock, $5 par value 169,250
Paid-in capital in excess of par value, common stock 0
Retained earnings 116,725
$562,200 $0
Statement of cash flows
Operating activities
Investing activities
Financing activities
Non cash investing and financing activities
Purchase of equipment financed by long-term note payable
$0 $0

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