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)Loss on sale of equipmentIncome before taxesIncome taxes expenseNet incomeAssetsCashAccounts receivableInventoryPrepaid expensesTotal current assetsFORTEN COMPANYIncome StatementFor Current Year Ended December 31Total assetsEquipmentAccumulated depreciation-EquipmentLiabilities and EquityAccounts payableLong-term notes payableTotal liabilitiesFORTEN COMPANYComparative Balance SheetsDecember 31$ 141,40029,750EquityCommon stock, $5 par valuePaid-in capital in excess of par, common stockRetained earningsTotal liabilities and equity$ 627,500294,000333,500171,150d. Paid $49,725 cash to reduce the long-term notes payable.e. Issued 3,400 shares of common stock for $20 cash per share.1. Declared and paid cash dividends of $51,900.(14,125)148, 22536,850$ 111,375Current Year$ 63,40079,360289,1561,300433,216148,500(41,125)$540,591$ 62,14173,200135,341Prior Year$ 82,50059,625260,8002,075405,000117,000(50,500)$ 471,500$ 128,17565,550193,725176,25051,000178,000118,525$ 540,591 $ 471,500159, 2500Additional Information on Current Year Transactionsa. The loss on the cash sale of equipment was $14,125 (details in b).b. Sold equipment costing $73,875, with accumulated depreciation of $39,125, for $20,625 cash.c. Purchased equipment costing $105,375 by paying $48,000 cash and signing a long-term notes payable for thebalance. FORTEN COMPANYStatement of Cash FlowsFor Current Year Ended December 31Cash flows from operating activitiesNet incomeDepreciation expenseLoss on sale of equipmentIncrease in accounts receivableIncrease in merchandise inventoryNet cash provided by operating activitiesCash flows from investing activitiesLoss on sale of equipmentCash paid for equipmentNet cash used in investing activitiesCash flows from financing activitiesCash paid on long-term notesCash received from issuing stockCash paid for dividendsNet increase (decrease) in cashCash balance at December 31, prior yearCash balance at December 31, current yearX11,375 x29,750 x14,125SSIS55,2500055,25055,250

Cash flow statement is the statement which shows us how the cash was generated and how it is…

-often Company's current year Income statement, comparative balance sheets, and additional Information follow. Fo wear, (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.

-often Company's current year Income statement, comparative balance sheets, and additional Information follow. Fo wear, (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.

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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oped Dok H Int 0 ence [The following information applies to the questions displayed below] 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 Sens cash payments for Inventory. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income Assets Cash FORTEN COMPANY Comparative Balance Sheets December 31 Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities…
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