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, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash Accounts receivable $ 70,900 86,910 296,656 1,350 $ 87,500 64,625 265,800 Inventory Prepaid expenses Total current assets 2,175 420,100 122,000 (53,000) 455,816 143,500 (43,625) Equipment Accum. depreciation-Equipment Total assets $ 489,100 Liabilities and Equity Accounts payable $ 135,675 8,800 Short-term notes payable Total current liabilities Long-term notes payable Total liabilities 144,475 62,750 207,225 Equity Common stock, $5 par value 164, 250 Paid-in capital in excess of par, common stock 0 117,625 Retained earnings Total liabilities and equity $ 489,100 $ 555,691 $ 67,141 14,200 81,341 58,000 139,341 183,750 58,500 174,100 $ 555,691 FORTEN COMPANY Income Statement For Current Year Ended December 31 $ 652,500 299,000 353,500 $ 34,750 146,400 181,150 Other gains (losses) Loss on sale of equipment (19,125) Income before taxes 153,225 43,850 Income taxes expense Net income $ 109,375 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $19,125 (details in b). b. Sold equipment costing $88,875, with accumulated depreciation of $44,125, for $25,625 cash. c. Purchased equipment costing $110,375 by paying $58,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,400 cash by signing a short-term note payable. e. Paid $57,125 cash to reduce the long-term notes payable. f. Issued 3,900 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $52,900. Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Required: Prepare a complete statement of cash flows using a spreadsheet using the indirect method. (Enter all amounts as positive values.) FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 Analysis of Changes Debit December 31, Prior Credit December 31, Current Year Year Balance sheet-debit Cash $ 87,500 $ Accounts receivable 64,625 22,285 Inventory 265,800 30,856 Prepaid expenses 2,175 Equipment 122,000 110,375 $ 542,100 Balance sheet-credit Accumulated depreciation-Equipment $ 44,125 $ Accounts payable 68,534 Short-term notes payable Long-term notes payable 57,125 Common stock, $5 par value Paid-in capital in excess of par value, common stock. Retained earnings 52,900 Statement of cash flows Operating activities $ 53,000 $ 135,675 8,800 62,750 164,250 0 117,625 542,100 16,600 $ 825 88,875 34,750 5,400 52,375 19,500 58,500 109,375 $ $ 70,900 86,910 296,656 1,350 143,500 599,316 43,625 67,141 14,200 58,000 183,750 58,500 174,100 599,316 Statement of cash flows Operating activities Investing activities Financing activities Non cash investing and financing activities Purchase of equipment financed by long-term note payable 69 $ 542,100 $ 386,200 $ 386,200 $ 599,316 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, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash Accounts receivable $ 70,900 86,910 296,656 1,350 $ 87,500 64,625 265,800 Inventory Prepaid expenses Total current assets 2,175 420,100 122,000 (53,000) 455,816 143,500 (43,625) Equipment Accum. depreciation-Equipment Total assets $ 489,100 Liabilities and Equity Accounts payable $ 135,675 8,800 Short-term notes payable Total current liabilities Long-term notes payable Total liabilities 144,475 62,750 207,225 Equity Common stock, $5 par value 164, 250 Paid-in capital in excess of par, common stock 0 117,625 Retained earnings Total liabilities and equity $ 489,100 $ 555,691 $ 67,141 14,200 81,341 58,000 139,341 183,750 58,500 174,100 $ 555,691 FORTEN COMPANY Income Statement For Current Year Ended December 31 $ 652,500 299,000 353,500 $ 34,750 146,400 181,150 Other gains (losses) Loss on sale of equipment (19,125) Income before taxes 153,225 43,850 Income taxes expense Net income $ 109,375 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $19,125 (details in b). b. Sold equipment costing $88,875, with accumulated depreciation of $44,125, for $25,625 cash. c. Purchased equipment costing $110,375 by paying $58,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,400 cash by signing a short-term note payable. e. Paid $57,125 cash to reduce the long-term notes payable. f. Issued 3,900 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $52,900. Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Required: Prepare a complete statement of cash flows using a spreadsheet using the indirect method. (Enter all amounts as positive values.) FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 Analysis of Changes Debit December 31, Prior Credit December 31, Current Year Year Balance sheet-debit Cash $ 87,500 $ Accounts receivable 64,625 22,285 Inventory 265,800 30,856 Prepaid expenses 2,175 Equipment 122,000 110,375 $ 542,100 Balance sheet-credit Accumulated depreciation-Equipment $ 44,125 $ Accounts payable 68,534 Short-term notes payable Long-term notes payable 57,125 Common stock, $5 par value Paid-in capital in excess of par value, common stock. Retained earnings 52,900 Statement of cash flows Operating activities $ 53,000 $ 135,675 8,800 62,750 164,250 0 117,625 542,100 16,600 $ 825 88,875 34,750 5,400 52,375 19,500 58,500 109,375 $ $ 70,900 86,910 296,656 1,350 143,500 599,316 43,625 67,141 14,200 58,000 183,750 58,500 174,100 599,316 Statement of cash flows Operating activities Investing activities Financing activities Non cash investing and financing activities Purchase of equipment financed by long-term note payable 69 $ 542,100 $ 386,200 $ 386,200 $ 599,316
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Related Book For
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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