Forten Company, a merchandiser, recently completed its calendar- year 2013 operations. For the year, (1) all sales
Question:
Additional Information on Year 2013 Transactions
a. The loss on the cash sale of equipment was $ 5,125 (details 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 note payable for the balance.
d. Borrowed $ 4,000 cash by signing a short-term note payable.
e. Paid $ 50,125 cash to reduce the long-term notes payable.
f. Issued 2,500 shares of common stock for $ 20 cash per share.
g. Declared and paid cash dividends of $ 50,100.
Required
1. Prepare a complete statement of cash flows; report its operating activities using the indirect method. Disclose any noncash investing and financing activities in a note.
Analysis Component
2. Analyze and discuss the statement of cash flows prepared in part 1, giving special attention to the wisdom of the cash dividendpayment.
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Step by Step Answer:
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta