[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 cash payments for Inventory. 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 Incone Statenent For Current Year Ended 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 Equity Connon stock, $5 par value FORTEN COMPANY Comparative Balance Sheets December 31 Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions $ 132,400 20,750 G $582,500 285,000 297,500 153,150 (5,125) 139,225 24,250 $ 114,975 Current Year Prior Year $ 73,500 50,625 $ 49,800 65,810 275,656 1,250 251,800 1,875 392,516 157,500 (36,625) $ 513,391 $ 53,141 75,000 128,141 162,750 37,500 185,000 $ 513,391 d. Pald $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. 377,800 108,000 (46,000) $ 439,800 $ 114,675 54,750 169,425 150,250 Show Transcribed Text e 120,125 $ 439,800 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $5,125 (detalls 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. Required: Prepare a complete statement of cash flows using a spreadsheet using the Indirect method. Note: Enter all amounts as positive values.

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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[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 cash payments for Inventory.
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
Income Statement
For Current Year Ended December 31
Accounts receivable
Inventory
Prepaid expenses
Total current assets
FORTEN COMPANY
Comparative Balance Sheets
December 31
Equipment
Accumulated depreciation-Equipment
Total assets
labilities and
Accounts payable
Long-term notes payable.
Total liabilities
Equity
Connon stock, $5 par value
Paid-in capital in excess of par, connon stock.
Retained earnings
Total liabilities and equity
Additional Information on Current Year Transactions
$ 132,400
20,750
G
$ 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
162,750
37,500
185,000
$ 513,391
d. Pald $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.
Prior Year
$ 73,500
50,625
251,800
1,875
J
377,800
108,000
(46,000)
$439,800
Show Transcribed Text
$ 114,675
54,750
169,425
150,250
120,125
$439,800
Additional Information on Current Year Transactions
a. The loss on the cash sale of equipment was $5,125 (detalls 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.
Required:
Prepare a complete statement of cash flows using a spreadsheet using the Indirect method.
Note: Enter all amounts as positive values.
Transcribed Image Text:[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 cash payments for Inventory. 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 Income Statement For Current Year Ended December 31 Accounts receivable Inventory Prepaid expenses Total current assets FORTEN COMPANY Comparative Balance Sheets December 31 Equipment Accumulated depreciation-Equipment Total assets labilities and Accounts payable Long-term notes payable. Total liabilities Equity Connon stock, $5 par value Paid-in capital in excess of par, connon stock. Retained earnings Total liabilities and equity Additional Information on Current Year Transactions $ 132,400 20,750 G $ 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 75,000 128,141 162,750 37,500 185,000 $ 513,391 d. Pald $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. Prior Year $ 73,500 50,625 251,800 1,875 J 377,800 108,000 (46,000) $439,800 Show Transcribed Text $ 114,675 54,750 169,425 150,250 120,125 $439,800 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $5,125 (detalls 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. Required: Prepare a complete statement of cash flows using a spreadsheet using the Indirect method. Note: Enter all amounts as positive values.
Balance sheet-debit
Cash
Accounts receivable
Inventory
Prepaid expenses
Equipment
Balance sheet-credit
Accumulated depreciation Equipment
Accounts payable
Long-term notes payable
Common stock, $5 par value
Paid-in capital in excess of par value, common stock
Retained earnings
Statement of cash flows
Operating activities
FORTEN COMPANY
Spreadsheet for Statement of Cash Flows
For Current Year Ended December 31
Investing activities
Financing activities
G
December 31, Prior
Year
Non cash investing and financing activities
Purchase of equipment financed by long-term notes payable
S
S
S
S
73,500
50,625
251,800
1.875
108,000
485,800
Show Transcribed Text
46,000
114.675
54,750
150,250
120,125
485,800
Analysis of Changes
Debit
Credit
December 31,
Current Year
$
$
$
49.800
49,800
Transcribed Image Text:Balance sheet-debit Cash Accounts receivable Inventory Prepaid expenses Equipment Balance sheet-credit Accumulated depreciation Equipment Accounts payable Long-term notes payable Common stock, $5 par value Paid-in capital in excess of par value, common stock Retained earnings Statement of cash flows Operating activities FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 Investing activities Financing activities G December 31, Prior Year Non cash investing and financing activities Purchase of equipment financed by long-term notes payable S S S S 73,500 50,625 251,800 1.875 108,000 485,800 Show Transcribed Text 46,000 114.675 54,750 150,250 120,125 485,800 Analysis of Changes Debit Credit December 31, Current Year $ $ $ 49.800 49,800
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