
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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
Accounts receivable
Inventory
FORTEN COMPANY
Income Statement
For Current Year Ended December 31
Prepaid expenses
Total current assets
FORTEN COMPANY
Comparative Balance Sheets
December 31
Equipment
Accumulated depreciation-Equipment
Total assets
Liabilities and Equity
Accounts payable
Long-term notes payable
Total liabilities
Equity
Common stock, $5 par value
Paid-in capital in excess of par, common stock
Retained earnings
Total liabilities and equity
$ 132,400
20, 750
$ 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
Prior Year
$ 73,500
50, 625
251,800
1,875
377,800
108,000
(46,000)
$ 439,800
$ 114,675
54,750
169,425
150, 250
0
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.
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.
1. Declared and paid cash dividends of $50,100.](https://content.bartleby.com/qna-images/question/6ba0c8e6-85b4-498d-be15-eb5646d0aebd/6b6c5ae5-f12a-48c2-9b98-6fcf57da4c46/gsh353n_thumbnail.jpeg)
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
FORTEN COMPANY
Income Statement
For Current Year Ended December 31
Prepaid expenses
Total current assets
FORTEN COMPANY
Comparative Balance Sheets
December 31
Equipment
Accumulated depreciation-Equipment
Total assets
Liabilities and Equity
Accounts payable
Long-term notes payable
Total liabilities
Equity
Common stock, $5 par value
Paid-in capital in excess of par, common stock
Retained earnings
Total liabilities and equity
$ 132,400
20, 750
$ 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
Prior Year
$ 73,500
50, 625
251,800
1,875
377,800
108,000
(46,000)
$ 439,800
$ 114,675
54,750
169,425
150, 250
0
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.
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.
1. Declared and paid cash dividends of $50,100.

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
Depreciation expense
Loss on sale of equipment
Decrease in prepaid expenses
Investing activities
Loss on sale of equipment
Payment to purchase equipment
sprentahout for slebevel of cini FAME
Financing activities
Payment of cash dividends
Payment on long lean noves
Issued common stock for cash
Non cash investing and financing activities.
Purchase of equem anced by the term notes parede
✔
10
✔
000
IS
$
PINK YOU
73,500
50,625
251,800
1,875
108,000
485,800
46,000
114,675
54,750
150,250
0
120,125
485,800
S
15,185
23,856
96,375
30,125
61,534
46,125
50,100
114,975
5,125
625
12.500
23.700 €
5
Copert
23,700 S
625
46,875
66,375
12,500✔
37,500
114,975
20,750 S
15,185
23.856
DECNINE 30
Current Year
50.1002
$ 550,100
3
IS
49,800
65,810
275,856
1,250
157,500
550,018
36,625
53,141
75,000
162,750
550.018
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