[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) 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 $ 150,400 38,750 FORTEN COMPANY Comparative Balance Sheets At December 31 Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable. Total liabilities Equity Common shares, $5 par value Paid-in capital in excess of par, common shares Retained earnings Total liabilities and equity $ 672,500 303,000 369,500 189,150 (23,125) 157,225 49,450 $ 107,775 d. Paid $53,325 cash to reduce the long-term note payable. e. Issued 4,300 common shares for $20 cash per share. 1. Declared and paid cash dividends of $53,700. Current Year $ 76,900 92,950 302,656 1,390 473,896 139,500 (45,625) $ 567,771 $ 71,141 71,400 142,541 Prior Year $ 91,500 68,625 269,800 2,255 432,180 126,000 (55,000) $ 503,180 $ 141,675 76,350 218,025 168,250 189,750 64,500 170,980 116,905 $ 567,771 $ 503,180 8 Additional Information on Current-Year Transactions a. The loss on the cash sale of equipment was $23,125 (details in b). b. Sold equipment costing $100,875, with accumulated depreciation of $48,125, for $29,625 cash. c. Purchased equipment costing $114,375 by paying $66,000 cash and signing a long-term note payable for the balance.
[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) 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 $ 150,400 38,750 FORTEN COMPANY Comparative Balance Sheets At December 31 Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable. Total liabilities Equity Common shares, $5 par value Paid-in capital in excess of par, common shares Retained earnings Total liabilities and equity $ 672,500 303,000 369,500 189,150 (23,125) 157,225 49,450 $ 107,775 d. Paid $53,325 cash to reduce the long-term note payable. e. Issued 4,300 common shares for $20 cash per share. 1. Declared and paid cash dividends of $53,700. Current Year $ 76,900 92,950 302,656 1,390 473,896 139,500 (45,625) $ 567,771 $ 71,141 71,400 142,541 Prior Year $ 91,500 68,625 269,800 2,255 432,180 126,000 (55,000) $ 503,180 $ 141,675 76,350 218,025 168,250 189,750 64,500 170,980 116,905 $ 567,771 $ 503,180 8 Additional Information on Current-Year Transactions a. The loss on the cash sale of equipment was $23,125 (details in b). b. Sold equipment costing $100,875, with accumulated depreciation of $48,125, for $29,625 cash. c. Purchased equipment costing $114,375 by paying $66,000 cash and signing a long-term note payable for the balance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required Information
[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)
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
Equipment
Accumulated depreciation-Equipment
Total assets
Liabilities and Equity
Accounts payable
Long-term notes payable
Total liabilities
Equity
Common shares, $5 par value
$ 150,400
38,750
FORTEN COMPANY
Comparative Balance Sheets
At December 31
$ 672,500
303,000
369,500
189,150
(23,125)
157,225
49,450
$ 107,775
Current Year
$ 76,900
92,950
302,656
1,390
473,896
139,500
(45,625)
$ 567,771
$ 71,141
71,400
142,541
189,750
64,500
170,980
$ 567,771
Prior Year
$ 91,500
68,625
269,800
2,255
432,180
126,000
(55,000)
$ 503,180
$ 141,675
76,350
218,825
168,250
8
116,905
$ 503,180
Paid-in capital in excess of par, common shares
Retained earnings
Total liabilities and equity
Additional Information on Current-Year Transactions
a. The loss on the cash sale of equipment was $23,125 (details in b).
b. Sold equipment costing $100,875, with accumulated depreciation of $48,125, for $29,625 cash.
c. Purchased equipment costing $114,375 by paying $66,000 cash and signing a long-term note payable for the balance.
d. Paid $53,325 cash to reduce the long-term note payable.
e. Issued 4,300 common shares for $20 cash per share.
1. Declared and paid cash dividends of $53,700.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F73bec75a-76bc-4068-8ade-f7b89e4f66a3%2Fb2e1f3c1-0dcb-46d6-bb38-4fc02c7bbf65%2F4y122mb_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
[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)
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
Equipment
Accumulated depreciation-Equipment
Total assets
Liabilities and Equity
Accounts payable
Long-term notes payable
Total liabilities
Equity
Common shares, $5 par value
$ 150,400
38,750
FORTEN COMPANY
Comparative Balance Sheets
At December 31
$ 672,500
303,000
369,500
189,150
(23,125)
157,225
49,450
$ 107,775
Current Year
$ 76,900
92,950
302,656
1,390
473,896
139,500
(45,625)
$ 567,771
$ 71,141
71,400
142,541
189,750
64,500
170,980
$ 567,771
Prior Year
$ 91,500
68,625
269,800
2,255
432,180
126,000
(55,000)
$ 503,180
$ 141,675
76,350
218,825
168,250
8
116,905
$ 503,180
Paid-in capital in excess of par, common shares
Retained earnings
Total liabilities and equity
Additional Information on Current-Year Transactions
a. The loss on the cash sale of equipment was $23,125 (details in b).
b. Sold equipment costing $100,875, with accumulated depreciation of $48,125, for $29,625 cash.
c. Purchased equipment costing $114,375 by paying $66,000 cash and signing a long-term note payable for the balance.
d. Paid $53,325 cash to reduce the long-term note payable.
e. Issued 4,300 common shares for $20 cash per share.
1. Declared and paid cash dividends of $53,700.
Transcribed Image Text: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
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in cash
Cash balance at December 31, prior year
Cash balance at December 31, current year
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