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 $ 49,800 $ 73,500 Accounts receivable 65,810 50,625 Inventory 275,656 251,800 Prepaid expenses 1,250 1,875 Total current assets 392,516 377,800 Equipment 157,500 108,000 Accum. depreciation—Equipment (36,625 ) (46,000 ) Total assets $ 513,391 $ 439,800 Liabilities and Equity Accounts payable $ 53,141 $ 114,675 Short-term notes payable 10,000 6,000 Total current liabilities 63,141 120,675 Long-term notes payable 65,000 48,750 Total liabilities 128,141 169,425 Equity Common stock, $5 par value 162,750 150,250 Paid-in capital in excess of par, common stock 37,500 0 Retained earnings 185,000 120,125 Total liabilities and equity $ 513,391 $ 439,800 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 582,500 Cost of goods sold 285,000 Gross profit 297,500 Operating expenses Depreciation expense $ 20,750 Other expenses 132,400 153,150 Other gains (losses) Loss on sale of equipment (5,125 ) Income before taxes 139,225 Income taxes expense 24,250 Net income $ 114,975 Additional Information on Current Year Transactions The loss on the cash sale of equipment was $5,125 (details in b). Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance. Borrowed $4,000 cash by signing a short-term note payable. Paid $50,125 cash to reduce the long-term notes payable. Issued 2,500 shares of common stock for $20 cash per share. Declared and paid cash dividends of $50,100. 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'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 $ 49,800 $ 73,500 Accounts receivable 65,810 50,625 Inventory 275,656 251,800 Prepaid expenses 1,250 1,875 Total current assets 392,516 377,800 Equipment 157,500 108,000 Accum. depreciation—Equipment (36,625 ) (46,000 ) Total assets $ 513,391 $ 439,800 Liabilities and Equity Accounts payable $ 53,141 $ 114,675 Short-term notes payable 10,000 6,000 Total current liabilities 63,141 120,675 Long-term notes payable 65,000 48,750 Total liabilities 128,141 169,425 Equity Common stock, $5 par value 162,750 150,250 Paid-in capital in excess of par, common stock 37,500 0 Retained earnings 185,000 120,125 Total liabilities and equity $ 513,391 $ 439,800 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 582,500 Cost of goods sold 285,000 Gross profit 297,500 Operating expenses Depreciation expense $ 20,750 Other expenses 132,400 153,150 Other gains (losses) Loss on sale of equipment (5,125 ) Income before taxes 139,225 Income taxes expense 24,250 Net income $ 114,975 Additional Information on Current Year Transactions The loss on the cash sale of equipment was $5,125 (details in b). Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance. Borrowed $4,000 cash by signing a short-term note payable. Paid $50,125 cash to reduce the long-term notes payable. Issued 2,500 shares of common stock for $20 cash per share. Declared and paid cash dividends of $50,100. 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.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

FORTEN COMPANY Comparative Balance Sheets December 31
	Current Year		Prior Year
Assets
Cash		$	49,800		$	73,500
Accounts receivable			65,810			50,625
Inventory			275,656			251,800
Prepaid expenses			1,250			1,875
Total current assets			392,516			377,800
Equipment			157,500			108,000
Accum. depreciation—Equipment			(36,625	)		(46,000	)
Total assets		$	513,391		$	439,800
Liabilities and Equity
Accounts payable		$	53,141		$	114,675
Short-term notes payable			10,000			6,000
Total current liabilities			63,141			120,675
Long-term notes payable			65,000			48,750
Total liabilities			128,141			169,425
Equity
Common stock, $5 par value			162,750			150,250
Paid-in capital in excess of par, common stock			37,500			0
Retained earnings			185,000			120,125
Total liabilities and equity		$	513,391		$	439,800

FORTEN COMPANY Income Statement For Current Year Ended December 31
Sales			$	582,500
Cost of goods sold				285,000
Gross profit				297,500
Operating expenses
Depreciation expense	$	20,750
Other expenses		132,400		153,150
Other gains (losses)
Loss on sale of equipment				(5,125	)
Income before taxes				139,225
Income taxes expense				24,250
Net income			$	114,975

Additional Information on Current Year Transactions

The loss on the cash sale of equipment was $5,125 (details in b).
Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash.
Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance.
Borrowed $4,000 cash by signing a short-term note payable.
Paid $50,125 cash to reduce the long-term notes payable.
Issued 2,500 shares of common stock for $20 cash per share.
Declared and paid cash dividends of $50,100.

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.)

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