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) 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 FORTEN COMPANY Income Statement For Current Year Ended December 31 Liabilities and Equity Accounts payable Long-term notes payable Total liabilities Equity Common stock, $5 par value $ 146,488 34,758 FORTEN COMPANY Comparative Balance Sheets December 31 Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 652,500 299,000 353,500 181,150 (19,125) 153,225 43,850 $ 109,375 Current Year d. Pald $51,725 cash to reduce the long-term notes payable. e. Issued 3,900 shares of common stock for $20 cash per share. 1. Declared and paid cash dividends of $52,900. $ 70,900 86,910 296,656 1,350 455,816 143,588 (43,625) $ 555,691 $ 67,141 72,200 139,341 183,758 58,500 174,188 $ 555,691 Prior Year $ 87,588 64,625 265,888 2,175 420, 180 122,888 (53,000) $ 489,100 $ 135,675 71,550 287,225 164,250 8 117,625 $ 489,100 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $19,125 (details in b). b. Sold equipment costing $88,875, with accumulated depreciation of $44,125, for $25,625 cash. c. Purchased equipment costing $110,375 by paying $58,000 cash and signing a long-term notes payable for the balance.
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) 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 FORTEN COMPANY Income Statement For Current Year Ended December 31 Liabilities and Equity Accounts payable Long-term notes payable Total liabilities Equity Common stock, $5 par value $ 146,488 34,758 FORTEN COMPANY Comparative Balance Sheets December 31 Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 652,500 299,000 353,500 181,150 (19,125) 153,225 43,850 $ 109,375 Current Year d. Pald $51,725 cash to reduce the long-term notes payable. e. Issued 3,900 shares of common stock for $20 cash per share. 1. Declared and paid cash dividends of $52,900. $ 70,900 86,910 296,656 1,350 455,816 143,588 (43,625) $ 555,691 $ 67,141 72,200 139,341 183,758 58,500 174,188 $ 555,691 Prior Year $ 87,588 64,625 265,888 2,175 420, 180 122,888 (53,000) $ 489,100 $ 135,675 71,550 287,225 164,250 8 117,625 $ 489,100 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $19,125 (details in b). b. Sold equipment costing $88,875, with accumulated depreciation of $44,125, for $25,625 cash. c. Purchased equipment costing $110,375 by paying $58,000 cash and signing a long-term notes payable for the balance.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 48CE
Related questions
Question
H1.
Account
![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)
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
FORTEN COMPANY
Income Statement
For Current Year Ended December 31
Liabilities and Equity
Accounts payable
Long-term notes payable
Total liabilities
Equity
Common stock, $5 par value
$ 146,488
34,758
FORTEN COMPANY
Comparative Balance Sheets
December 31
Paid-in capital in excess of par, common stock
Retained earnings
Total liabilities and equity
$ 652,500
299,000
353,500
181,150
(19,125)
153,225
43,850
$ 109,375
Current Year
d. Pald $51,725 cash to reduce the long-term notes payable.
e. Issued 3,900 shares of common stock for $20 cash per share.
1. Declared and paid cash dividends of $52,900.
$ 70,900
86,910
296,656
1,350
455,816
143,588
(43,625)
$ 555,691
$ 67,141
72,200
139,341
183,758
58,500
174,188
$ 555,691
Prior Year
$ 87,588
64,625
265,888
2,175
420, 180
122,888
(53,000)
$ 489,100
$ 135,675
71,550
287,225
164,250
8
117,625
$ 489,100
Additional Information on Current Year Transactions
a. The loss on the cash sale of equipment was $19,125 (details in b).
b. Sold equipment costing $88,875, with accumulated depreciation of $44,125, for $25,625 cash.
c. Purchased equipment costing $110,375 by paying $58,000 cash and signing a long-term notes payable for the
balance.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcd96efc3-2f98-4cac-898c-7da2d5d05bd8%2F48a5256e-a450-49b1-940c-f25247d2090c%2Fcvus1t_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)
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
FORTEN COMPANY
Income Statement
For Current Year Ended December 31
Liabilities and Equity
Accounts payable
Long-term notes payable
Total liabilities
Equity
Common stock, $5 par value
$ 146,488
34,758
FORTEN COMPANY
Comparative Balance Sheets
December 31
Paid-in capital in excess of par, common stock
Retained earnings
Total liabilities and equity
$ 652,500
299,000
353,500
181,150
(19,125)
153,225
43,850
$ 109,375
Current Year
d. Pald $51,725 cash to reduce the long-term notes payable.
e. Issued 3,900 shares of common stock for $20 cash per share.
1. Declared and paid cash dividends of $52,900.
$ 70,900
86,910
296,656
1,350
455,816
143,588
(43,625)
$ 555,691
$ 67,141
72,200
139,341
183,758
58,500
174,188
$ 555,691
Prior Year
$ 87,588
64,625
265,888
2,175
420, 180
122,888
(53,000)
$ 489,100
$ 135,675
71,550
287,225
164,250
8
117,625
$ 489,100
Additional Information on Current Year Transactions
a. The loss on the cash sale of equipment was $19,125 (details in b).
b. Sold equipment costing $88,875, with accumulated depreciation of $44,125, for $25,625 cash.
c. Purchased equipment costing $110,375 by paying $58,000 cash and signing a long-term notes payable for the
balance.
Transcribed Image Text:Required:
1. Prepare a complete statement of cash flows using the Indirect method for the current year.
Note: Amounts to be deducted should be indicated with a minus sign.
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operations:
Income statement items not affecting cash
FORTEN COMPANY
Statement of Cash Flows
For Current Year Ended December 31
Changes in current assets and current liabilities
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
$
S
$
0
0
0
0
0
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