Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year,...
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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 $ 622,500 Cost of goods sold 293,000 Gross profit Operating expenses (excluding depreciation) $ 140,400 Depreciation expense Other gains (losses) 329,500 28,750 169,150 Loss on sale of equipment Income before taxes (13,125) Income taxes expense Net income 147,225 35,450 $ 111,775 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 61,900 77,850 287,656 $ 81,500 58,625 259,800 2,055 1,290 401,980 Assets 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 428,696 149,500 (40,625) $ 537,571 $ 61,141 73,400 134,541 116,000 (50,000) $ 467,980 $ 126,675 64,350 191,025 158,250 Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity 174,750 49,500 178,780 $ 537,571 0 118,705 $ 467,980 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $13,125 (details in b). b. Sold equipment costing $70,875, with accumulated depreciation of $38,125, for $19,625 cash. c. Purchased equipment costing $104,375 by paying $46,000 cash and signing a long-term notes payable for the balance. d. Paid $49,325 cash to reduce the long-term notes payable. e. Issued 3,300 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $51,700. 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 Cash flows from investing activities Cash flows from financing activities: Cash paid for equipment 0 0 Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0 0 0 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 $ 622,500 Cost of goods sold 293,000 Gross profit Operating expenses (excluding depreciation) $ 140,400 Depreciation expense Other gains (losses) 329,500 28,750 169,150 Loss on sale of equipment Income before taxes (13,125) Income taxes expense Net income 147,225 35,450 $ 111,775 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 61,900 77,850 287,656 $ 81,500 58,625 259,800 2,055 1,290 401,980 Assets 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 428,696 149,500 (40,625) $ 537,571 $ 61,141 73,400 134,541 116,000 (50,000) $ 467,980 $ 126,675 64,350 191,025 158,250 Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity 174,750 49,500 178,780 $ 537,571 0 118,705 $ 467,980 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $13,125 (details in b). b. Sold equipment costing $70,875, with accumulated depreciation of $38,125, for $19,625 cash. c. Purchased equipment costing $104,375 by paying $46,000 cash and signing a long-term notes payable for the balance. d. Paid $49,325 cash to reduce the long-term notes payable. e. Issued 3,300 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $51,700. 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 Cash flows from investing activities Cash flows from financing activities: Cash paid for equipment 0 0 Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0 0 0
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Related Book For
Principles Of Financial Accounting (Chapters 1-17)
ISBN: 9781260780147
25th Edition
Authors: John Wild
Posted Date:
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