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, (4) all debits to Accounts Payable reflect cash payments for inventory,and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses.FORTEN COMPANYComparative Balance SheetsDecember 31Current YearPrlor YearAssetsCash$ 73,90089,930$ 89,50066,625Accounts receivableInventoryPrepaid expenses299,656267,8001,3702,215Total current assets464,856426,140EquipmentAccum. depreciation-Equipment124,000(54,000)$ 496,140141,500(44,625)561,731Total assets24Liabilities and EquityAccounts payableShort-term notes payable2469,141$ 138,67514,8009,200Total current liabilities83,94157,000147,87564,750Long-term notes payableTotal liabilities140,941212,625EquityCommon stock, $5 par valuePaid-in capital in excess of par, common stockRetained earnings186,750166,25061,500172,540$ 561,731117,265Total liabilities and equity$ 496,140FORTEN COMPANYIncome StatementFor Current Year Ended December 31Sales$ 662,500Cost of goods soldGross profit301.000361,500Operating expensesDepreciation expenseOther expenses$ 36,750148,400185,150Other gains (losses)Loss on sale of equipment(21,125)Income before taxes155,225Income taxes expense46,650Net income$ 108,575Additional Information on Current Year Transactionsa. The loss on the cash sale of equipment was $21,125 (details in b).b. Sold equipment costing $94,875, with accumulated depreciation of $46,125, for $27,625 cash.C Purchased equipment costing $112,375 by paying $62,000 cash and signing a long-term note payable for thebalance.d. Borrowed $5,600 cash by signing a short-term note payable.e. Paid $58,125 cash to reduce the long-term notes payable.f. Issued 4,100 shares of common stock for $20 cash per share.g. Declared and paid cash dividends of $53,30.Required:1. Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to bededucted should be indicated with a minus sign.)

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 the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers,(3) all purchases

Solution: Cash Flow Statement: A cash flow statement is one of the financial statements of a…

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Business

Accounting

1. Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.)

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter5: Accounting Systems

Section: Chapter Questions

Problem 5PB: The transactions completed by AM Express Company during March, the first month of the fiscal year,...

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