3.3 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. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 587,500 Cost of goods sold 286,000 Gross profit 301,500 Operating expenses (excluding depreciation) $ 133,400 Depreciation expense 21,750 155,150 Other gains (losses) Loss on sale of equipment (6,125) Income before taxes 140,225 Income taxes expense 25,650 Net income $ 114,575 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 51,400 $ 74,500 Accounts receivable 67,310 51,625 Inventory 277,156 252,800 Prepaid expenses 1,300 2,025 Total current assets 397,166 380,950 Equipment 156,500 109,000 Accumulated depreciation—Equipment (37,125) (46,500) Total assets $ 516,541 $ 443,450 Liabilities and Equity Accounts payable $ 54,141 $ 116,175 Long-term notes payable 74,800 55,950 Total liabilities 128,941 172,125 Equity Common stock, $5 par value 164,250 151,250 Paid-in capital in excess of par, common stock 39,000 0 Retained earnings 184,350 120,075 Total liabilities and equity $ 516,541 $ 443,450 Additional Information on Current Year Transactions The loss on the cash sale of equipment was $6,125 (details in b). Sold equipment costing $49,875, with accumulated depreciation of $31,125, for $12,625 cash. Purchased equipment costing $97,375 by paying $32,000 cash and signing a long-term notes payable for the balance. Paid $46,525 cash to reduce the long-term notes payable. Issued 2,600 shares of common stock for $20 cash per share. Declared and paid cash dividends of $50,300. Required: Prepare a complete statement of cash flows using a spreadsheet using the indirect method. (Enter all amounts as positive values.)

3.3 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. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 587,500 Cost of goods sold 286,000 Gross profit 301,500 Operating expenses (excluding depreciation) $ 133,400 Depreciation expense 21,750 155,150 Other gains (losses) Loss on sale of equipment (6,125) Income before taxes 140,225 Income taxes expense 25,650 Net income $ 114,575 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 51,400 $ 74,500 Accounts receivable 67,310 51,625 Inventory 277,156 252,800 Prepaid expenses 1,300 2,025 Total current assets 397,166 380,950 Equipment 156,500 109,000 Accumulated depreciation—Equipment (37,125) (46,500) Total assets $ 516,541 $ 443,450 Liabilities and Equity Accounts payable $ 54,141 $ 116,175 Long-term notes payable 74,800 55,950 Total liabilities 128,941 172,125 Equity Common stock, $5 par value 164,250 151,250 Paid-in capital in excess of par, common stock 39,000 0 Retained earnings 184,350 120,075 Total liabilities and equity $ 516,541 $ 443,450 Additional Information on Current Year Transactions The loss on the cash sale of equipment was $6,125 (details in b). Sold equipment costing $49,875, with accumulated depreciation of $31,125, for $12,625 cash. Purchased equipment costing $97,375 by paying $32,000 cash and signing a long-term notes payable for the balance. Paid $46,525 cash to reduce the long-term notes payable. Issued 2,600 shares of common stock for $20 cash per share. Declared and paid cash dividends of $50,300. Required: Prepare a complete statement of cash flows using a spreadsheet using the indirect method. (Enter all amounts as positive values.)

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter3: The Basics Of Record Keeping And Financial Statement Preparation: Income Statement

Section: Chapter Questions

Problem 35P

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Question

3.3

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.

FORTEN COMPANY
Income Statement
For Current Year Ended December 31
Sales		$ 587,500
Cost of goods sold		286,000
Gross profit		301,500
Operating expenses (excluding depreciation)	$ 133,400
Depreciation expense	21,750	155,150
Other gains (losses)
Loss on sale of equipment		(6,125)
Income before taxes		140,225
Income taxes expense		25,650
Net income		$ 114,575

FORTEN COMPANY
Comparative Balance Sheets
December 31
	Current Year	Prior Year
Assets
Cash	$ 51,400	$ 74,500
Accounts receivable	67,310	51,625
Inventory	277,156	252,800
Prepaid expenses	1,300	2,025
Total current assets	397,166	380,950
Equipment	156,500	109,000
Accumulated depreciation—Equipment	(37,125)	(46,500)
Total assets	$ 516,541	$ 443,450
Liabilities and Equity
Accounts payable	$ 54,141	$ 116,175
Long-term notes payable	74,800	55,950
Total liabilities	128,941	172,125
Equity
Common stock, $5 par value	164,250	151,250
Paid-in capital in excess of par, common stock	39,000	0
Retained earnings	184,350	120,075
Total liabilities and equity	$ 516,541	$ 443,450

Additional Information on Current Year Transactions

The loss on the cash sale of equipment was $6,125 (details in b).
Sold equipment costing $49,875, with accumulated depreciation of $31,125, for $12,625 cash.
Purchased equipment costing $97,375 by paying $32,000 cash and signing a long-term notes payable for the balance.
Paid $46,525 cash to reduce the long-term notes payable.
Issued 2,600 shares of common stock for $20 cash per share.
Declared and paid cash dividends of $50,300.

Required:
Prepare a complete statement of cash flows using a spreadsheet using the indirect method. (Enter all amounts as positive values.)

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