Forten Company's current year Income statement, comparative balance sheets, and additional Information follow. For the year....

  

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. Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) 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 Income Statement For Current Year Ended December 31. Total assets Equipment Accumulated depreciation-Equipment Liabilities and Equity Accounts payable Long-term notes payable Total liabilities Equity Common stock, $5 par value FORTEN COMPANY Comparative Balance Sheets December 31 $ 150,400 38,750 Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 672,500 303,000 369,500 189,150 (23,125) 157,225 49,450 $ 187,775 Current Year: Prior Year $ 91,500 $ 76,900 92,950 68,625 302,656 269,880 2,255 1,390 473,896 139,500 (45,625) $ 567,771 $ 71,141 71,400 142,541 189,750 64,500 178,988 $ 567,771 d. Pald $53,325 cash to reduce the long-term notes payable. e. Issued 4,300 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $53,700. 432,188 126,000 (55,000) $ 503,188 $ 141,675 76,350 218,025 168,250 8 116,905 $ 503,180 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $23,125 (detalls in b). b. Sold equipment costing $100,875, with accumulated depreciation of $48,125, for $29,625 cash. c. Purchased equipment costing $114,375 by paying $66,000 cash and signing a long-term notes payable for the balance. 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. 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. Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) 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 Income Statement For Current Year Ended December 31. Total assets Equipment Accumulated depreciation-Equipment Liabilities and Equity Accounts payable Long-term notes payable Total liabilities Equity Common stock, $5 par value FORTEN COMPANY Comparative Balance Sheets December 31 $ 150,400 38,750 Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 672,500 303,000 369,500 189,150 (23,125) 157,225 49,450 $ 187,775 Current Year: Prior Year $ 91,500 $ 76,900 92,950 68,625 302,656 269,880 2,255 1,390 473,896 139,500 (45,625) $ 567,771 $ 71,141 71,400 142,541 189,750 64,500 178,988 $ 567,771 d. Pald $53,325 cash to reduce the long-term notes payable. e. Issued 4,300 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $53,700. 432,188 126,000 (55,000) $ 503,188 $ 141,675 76,350 218,025 168,250 8 116,905 $ 503,180 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $23,125 (detalls in b). b. Sold equipment costing $100,875, with accumulated depreciation of $48,125, for $29,625 cash. c. Purchased equipment costing $114,375 by paying $66,000 cash and signing a long-term notes payable for the balance. 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.

Answer rating: 100% (QA)

A cash flow statement is prepared with the help of income statement account and balance sheet accoun... View the full answer