Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) $ 602,500 289,000 313,500 $ 136,400 24,750 161,150 Loss on sale of equipment (9,125) Income before taxes Income taxes expense Net income 143,225 29,850 $ 113,375 Assets Cash FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 55.900 $ 77.500 Problem 12-3A (Algo) Indirect: Statement of cash flows LO A1, P2, P3 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 FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current assets and current liabilities $ n ! Required information 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 $ 0 0 0 $ 0 $ 0 Assets FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year 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 stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions $ 55,900 71,810 281,656 $ 77,500 54,625 255,800 1,250 1,975 389,900 410,616 153,500 (38,625) $ 525,491 112,000 (48,000) $ 453,900 $ 120,675 59,550 180,225 $ 57,141 74,200 131,341 168,750 154,250 43,500 181,900 119,425 $ 525,491 $ 453,900 a. The loss on the cash sale of equipment was $9,125 (details in b). b. Sold equipment costing $58,875, with accumulated depreciation of $34,125, for $15,625 cash. c. Purchased equipment costing $100,375 by paying $38,000 cash and signing a long-term notes payable for the balance. d. Paid $47,725 cash to reduce the long-term notes payable. e. Issued 2,900 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50.900. 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 Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Other gains (losses) $ 602,500 289,000 313,500 $ 136,400 24,750 161,150 Loss on sale of equipment (9,125) Income before taxes Income taxes expense Net income 143,225 29,850 $ 113,375 Assets Cash FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 55.900 $ 77.500 Problem 12-3A (Algo) Indirect: Statement of cash flows LO A1, P2, P3 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 FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current assets and current liabilities $ n ! Required information 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 $ 0 0 0 $ 0 $ 0 Assets FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year 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 stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions $ 55,900 71,810 281,656 $ 77,500 54,625 255,800 1,250 1,975 389,900 410,616 153,500 (38,625) $ 525,491 112,000 (48,000) $ 453,900 $ 120,675 59,550 180,225 $ 57,141 74,200 131,341 168,750 154,250 43,500 181,900 119,425 $ 525,491 $ 453,900 a. The loss on the cash sale of equipment was $9,125 (details in b). b. Sold equipment costing $58,875, with accumulated depreciation of $34,125, for $15,625 cash. c. Purchased equipment costing $100,375 by paying $38,000 cash and signing a long-term notes payable for the balance. d. Paid $47,725 cash to reduce the long-term notes payable. e. Issued 2,900 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50.900.
Expert Answer:
Related Book For
Principles Of Financial Accounting (Chapters 1-17)
ISBN: 9781260780147
25th Edition
Authors: John Wild
Posted Date:
Students also viewed these accounting questions
-
1. Why is it that the statement "all rhombuses are squares" is false, but the statement "all squares are rhombuses" is true? Use an example to help with your explanation. 2. Given two segments with...
-
What ways can I make my Relational Data Model conversion meet the following requirements listed below? Am I on the right track? What corrections do I need to address? ERD: My Conversion of ERD onto a...
-
Recall the heat equation which we solved numerically T= = DTxx There we implemented an explicit numerical scheme (FTCS) which led to a conditionally stable solution - meaning that for certain time...
-
Use Gaussian elimination with backward substitution and two-digit rounding arithmetic to solve the following linear systems. Do not reorder the equations. (The exact solution to each system is x1 =...
-
1. What happen on covid 19 nowadays? What is the action of the government about increasing of the cases of covid-19? What is the rules and regulations Implemented under community quarantine? What is...
-
True or False: Welding on a fan blade requires the welding grounding clamp to be placed on the fan impeller itself.
-
Wilkman Semiconductors experienced the following activity in its Photolithography Department during December. Materials are added at the beginning of the photolithography process. Units: Work in...
-
Jamie Lee Jackson, age 27, full-time student and part-time bakery employee, has just moved into a bungalow-style, unfurnished home of her own. The house is only a one-bedroom, but the rent is...
-
Battery Wholesale, Inc. purchases batteries for $14 each, and it costs $11 to process an order. The company sells about 12,000 of a particular type of battery per year at a uniform rate. The company...
-
I need help describing security components of the servers-side of Snapchat. And what could be some possible security concerns or vulnerability?
-
Your understanding of systems thinking. How the book Credibility address systems thinking? Does the book align with or challenge your understanding of systems thinking? Consider all that you are...
-
How (if at all) have your views on your own culture(s) changed since the beginning of this course? How have they changed in regards to cultures that differ from your own?2. After exploring areas of...
-
Imagine yourself as the executive manager of an organization. You are responsible for establishing the three levels of management and how each level functions in the organization. One of the...
-
Dolf Schulman asked for your advice on several issues facing Almond Chemical's partner company, Chongquing No. 2 Chemical Company. Agreement was reached in several areas: They will continue to place...
-
What is water, and why is water essential to life? List three properties of water and how each is useful to many species on earth.
-
Find the center of mass of a thin triangular plate bounded by the y-axis and the lines y = x and y = 2 - x if (x, y) = 6x + 3y + 3.
-
The system in Figure P1.6 is at $20^{\circ} \mathrm{C}$. If atmospheric pressure is $101.3 \mathrm{kPa}$ and the absolute pressure at the bottom of the tank is $264.1 \mathrm{kPa}$, what is the...
-
A vertical, cylindrical tank with a diameter of $10 \mathrm{~m}$ and a depth of $4 \mathrm{~m}$ is filled to the top with water at $25^{\circ} \mathrm{C}$. If the water is heated to $60^{\circ}...
-
An adult, male giraffe has a blood pressure on the order of $37 \mathrm{kPa}$ above atmospheric pressure. How high can the giraffe heart pump a column of blood with specific gravity of 1.06 ?
Study smarter with the SolutionInn App