Forten Company's current year income statement, comparative balance sheets, and additional information follow. For theyear, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) allpurchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory.SalesCost of goods soldGross profitOperating expenses (excluding depreciation)Depreciation expenseOther gains (losses)FORTEN COMPANYIncome StatementFor Current Year Ended December 31Loss on sale of equipmentIncome before taxesIncome taxes expenseNet incomeAssetsCashAccounts receivableInventoryPrepaid expensesTotal current assetsEquipmentAccumulated depreciation-EquipmentTotal assetsLiabilities and EquityAccounts payableLong-term notes payableTotal liabilitiesEquityCommon stock, $5 par valueFORTEN COMPANYComparative Balance SheetsDecember 31$ 132,40020,750Paid-in capital in excess of par, common stockRetained earningsTotal liabilities and equity$ 582,500285,000297,500153,150(5,125)139,22524,250$ 114,975Current Year$ 49,80065,810275,6561,250392,516157,500(36,625)$ 513,391$ 53,14175,000128,141162,75037,500185,000$ 513,391Prior Year$ 73,50050,625251,8001,875377,800108,000(46,000)$ 439,800$ 114,67554,750169,425150, 2500120,125$ 439,800 Additional Information on Current Year Transactionsa. The loss on the cash sale of equipment was $5,125 (details in b).b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash.c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term notes payable for the balance.d. Paid $46,125 cash to reduce the long-term notes payable.e. Issued 2,500 shares of common stock for $20 cash per share.f. Declared and paid cash dividends of $50,100.Required:Prepare a complete statement of cash flows using the direct method. (Amounts to be deducted should be indicated with a minussign.)

Name: Forten Company's current year income statement, comparative balance s
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Description: Forten Company's current year income statement, comparative balance sheets, and additional information follow. For theyear, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) allpurchases

First we need prepare Accounts Receivable Account to find out cash collection from customers.…

Business

Accounting

Forten Company's current year income statement, comparative balance sheets, and additional information follow. 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. Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) FORTEN COMPANY Income Statement For Current Year Ended December 31 Loss on sale of equipment Income before taxes Income taxes expense Net income Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets $ 132,400 20,750 FORTEN COMPANY Comparative Balance Sheets December 31 Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities $ 582,500 285,000 297,500 153,150 (5,125) 139,225 24,250 $ 114,975 Current Year $ 49,800 65,810 275,656 1,250 392,516 157,500 (36,625) $ 513,391 $ 53,141 75,000 128,141 Prior Year $ 73,500 50,625 251,800 1,875 377,800 108,000 (46,000) $ 439,800 $ 114,675 54,750 169,425

Forten Company's current year income statement, comparative balance sheets, and additional information follow. 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. Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) FORTEN COMPANY Income Statement For Current Year Ended December 31 Loss on sale of equipment Income before taxes Income taxes expense Net income Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets $ 132,400 20,750 FORTEN COMPANY Comparative Balance Sheets December 31 Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities $ 582,500 285,000 297,500 153,150 (5,125) 139,225 24,250 $ 114,975 Current Year $ 49,800 65,810 275,656 1,250 392,516 157,500 (36,625) $ 513,391 $ 53,141 75,000 128,141 Prior Year $ 73,500 50,625 251,800 1,875 377,800 108,000 (46,000) $ 439,800 $ 114,675 54,750 169,425

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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