1. The company's Income statement, Balance sheet, and additional information is given below. 
2. 
   
3. For year sales are on credit, all credits to accounts receivable reflect cash receipts from customers, all the purchases of inventory on credit, and all debts to accounts payable reflect cash payment for inventory. 

  

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FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 135,400 23,750 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. 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 $ 597,500 288,000 309,500 159, 150 (8,125) d. Paid $47,325 cash to reduce the long-term notes payable. e. Issued 2,800 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50,700. 142,225 28,450 $ 113,775 Current Year Prior Year $ 54,400 $ 76,500 70,310 53,625 280,156 254,800 2,005 1,280 406,146 154,500 (38,125) $ 522,521 $ 56,141 74,400 130,541 167,250 42,000 182,730 $ 522,521 386,930 111,000 (47,500) $ 450,430 $ 119,175 58,350 177,525 153,250 119,655 $ 450,430 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $8,125 (details in b). b. Sold equipment costing $55,875, with accumulated depreciation of $33,125, for $14,625 cash. c. Purchased equipment costing $99,375 by paying $36,000 cash and signing a long-term notes payable for the bala FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 135,400 23,750 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. 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 $ 597,500 288,000 309,500 159, 150 (8,125) d. Paid $47,325 cash to reduce the long-term notes payable. e. Issued 2,800 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $50,700. 142,225 28,450 $ 113,775 Current Year Prior Year $ 54,400 $ 76,500 70,310 53,625 280,156 254,800 2,005 1,280 406,146 154,500 (38,125) $ 522,521 $ 56,141 74,400 130,541 167,250 42,000 182,730 $ 522,521 386,930 111,000 (47,500) $ 450,430 $ 119,175 58,350 177,525 153,250 119,655 $ 450,430 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $8,125 (details in b). b. Sold equipment costing $55,875, with accumulated depreciation of $33,125, for $14,625 cash. c. Purchased equipment costing $99,375 by paying $36,000 cash and signing a long-term notes payable for the bala

Answer rating: 100% (QA)

Net Cash Flows from Operating Activities Net income 113775 Adjustments for noncash items Depreciation expense 23750 Loss on sale of equipment 8125 Cha... View the full answer