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, and (4) all debits to Accounts Payable reflect cash payments for inventory.   FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales   $ 627,500 Cost of goods sold   294,000 Gross profit   333,500 Operating expenses (excluding depreciation) $ 141,400   Depreciation expense 29,750 171,150 Other gains (losses)     Loss on sale of equipment   (14,125) Income before taxes   148,225 Income taxes expense   36,850 Net income   $ 111,375    FORTEN COMPANY Comparative Balance Sheets December 31   Current Year Prior Year Assets     Cash $ 63,400 $ 82,500 Accounts receivable 79,360 59,625 Inventory 289,156 260,800 Prepaid expenses 1,300 2,075 Total current assets 433,216 405,000 Equipment 148,500 117,000 Accumulated depreciation—Equipment (41,125) (50,500) Total assets $ 540,591 $ 471,500 Liabilities and Equity     Accounts payable $ 62,141 $ 128,175 Long-term notes payable 73,200 65,550 Total liabilities 135,341 193,725 Equity     Common stock, $5 par value 176,250 159,250 Paid-in capital in excess of par, common stock 51,000 0 Retained earnings 178,000 118,525 Total liabilities and equity $ 540,591 $ 471,500   Additional Information on Current Year Transactions The loss on the cash sale of equipment was $14,125 (details in b). Sold equipment costing $73,875, with accumulated depreciation of $39,125, for $20,625 cash. Purchased equipment costing $105,375 by paying $48,000 cash and signing a long-term notes payable for the balance. Paid $49,725 cash to reduce the long-term notes payable. Issued 3,400 shares of common stock for $20 cash per share. Declared and paid cash dividends of $51,900.   Problem 16-5AB (Algo) Direct: Statement of cash flows LO P5 Required: Prepare a complete statement of cash flows using the direct method. (Amounts to be deducted should be indicated with a minus sign.)

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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, and (4) all debits to Accounts Payable reflect cash payments for inventory.
 

FORTEN COMPANY
Income Statement
For Current Year Ended December 31
Sales   $ 627,500
Cost of goods sold   294,000
Gross profit   333,500
Operating expenses (excluding depreciation) $ 141,400  
Depreciation expense 29,750 171,150
Other gains (losses)    
Loss on sale of equipment   (14,125)
Income before taxes   148,225
Income taxes expense   36,850
Net income   $ 111,375

  

FORTEN COMPANY
Comparative Balance Sheets
December 31
  Current Year Prior Year
Assets    
Cash $ 63,400 $ 82,500
Accounts receivable 79,360 59,625
Inventory 289,156 260,800
Prepaid expenses 1,300 2,075
Total current assets 433,216 405,000
Equipment 148,500 117,000
Accumulated depreciation—Equipment (41,125) (50,500)
Total assets $ 540,591 $ 471,500
Liabilities and Equity    
Accounts payable $ 62,141 $ 128,175
Long-term notes payable 73,200 65,550
Total liabilities 135,341 193,725
Equity    
Common stock, $5 par value 176,250 159,250
Paid-in capital in excess of par, common stock 51,000 0
Retained earnings 178,000 118,525
Total liabilities and equity $ 540,591 $ 471,500

 
Additional Information on Current Year Transactions

  1. The loss on the cash sale of equipment was $14,125 (details in b).
  2. Sold equipment costing $73,875, with accumulated depreciation of $39,125, for $20,625 cash.
  3. Purchased equipment costing $105,375 by paying $48,000 cash and signing a long-term notes payable for the balance.
  4. Paid $49,725 cash to reduce the long-term notes payable.
  5. Issued 3,400 shares of common stock for $20 cash per share.
  6. Declared and paid cash dividends of $51,900.

 

Problem 16-5AB (Algo) Direct: Statement of cash flows LO P5

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**
- [Blank for entry]
- [Blank for entry]
- [Blank for entry]
- [Blank for entry]

**Cash flows from investing activities**
- [Blank for entry]
- [Blank for entry]

**Cash flows from financing activities**
- [Blank for entry]
- [Blank for entry]
- [Blank for entry]
- [Blank for entry]

**Net increase (decrease) in cash**
- [Blank for entry]

**Cash balance at December 31, prior year**
- [Blank for entry]

**Cash balance at December 31, current year**
- [Blank for entry]

---

This template is designed to capture and display the cash flow activities of Forten Company over the current financial year. The statement is divided into three main sections: operating, investing, and financing activities. Each section is structured to allow input of specific cash flow items relevant to the company's financial transactions. The statement concludes with a summary of changes in cash balances from the previous year to the current year.
Transcribed Image Text:**FORTEN COMPANY** **Statement of Cash Flows** For Current Year Ended December 31 --- **Cash flows from operating activities** - [Blank for entry] - [Blank for entry] - [Blank for entry] - [Blank for entry] **Cash flows from investing activities** - [Blank for entry] - [Blank for entry] **Cash flows from financing activities** - [Blank for entry] - [Blank for entry] - [Blank for entry] - [Blank for entry] **Net increase (decrease) in cash** - [Blank for entry] **Cash balance at December 31, prior year** - [Blank for entry] **Cash balance at December 31, current year** - [Blank for entry] --- This template is designed to capture and display the cash flow activities of Forten Company over the current financial year. The statement is divided into three main sections: operating, investing, and financing activities. Each section is structured to allow input of specific cash flow items relevant to the company's financial transactions. The statement concludes with a summary of changes in cash balances from the previous year to the current year.
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