Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year,...
Fantastic news! We've Found the answer you've been seeking!
Question:
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. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 637,500 Cost of goods sold 296,000 Depreciation expense Loss on sale of equipment Income before taxes Gross profit Operating expenses (excluding depreciation) $ 143,400 Other gains (losses) 341,500 31,750 175,150 (16,125) 150,225 Income taxes expense Net income 39,650 $ 110,575 Assets Cash FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 66,400 82,380 $ 84,500 61,625 262,800 Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable 292,156 1,320 2,115 442,256 411,040 146,500 119,000 (42,125) (51,500) $ 546,631 $ 478,540 Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions $ 64,141 $ 131,175 72,800 136,941 67,950 199,125 179,250 161,250 54,000 0 176,440 118,165 $ 546,631 $ 478,540 a. The loss on the cash sale of equipment was $16,125 (details in b). b. Sold equipment costing $79,875, with accumulated depreciation of $41,125, for $22,625 cash. c. Purchased equipment costing $107,375 by paying $52,000 cash and signing a long-term notes payable for the balance. d. Paid $50,525 cash to reduce the long-term notes payable. e. Issued 3,600 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $52,300. 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: Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0 0 0 $ 0 $ 0 Required: Prepare a complete statement of cash flows using a spreadsheet using the indirect method. Note: Enter all amounts as positive values. Balance sheet-debit Cash Accounts receivable Inventory Prepaid expenses Equipment Balance sheet-credit Accumulated depreciation-Equipment Accounts payable FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 Analysis of Changes December 31, Prior December 31, Year Debit Current Year Credit $ 84,500 61,625 262,800 2,115 119,000 530,040 51,500 131,175 Long-term notes payable 67,950 Common stock, $5 par value 161,250 Paid-in capital in excess of par value, common stock 0 Retained earnings 118,165 530,040 Statement of cash flows Operating activities Investing activities Financing activities Non cash investing and financing activities Purchase of equipment financed by long-term notes payable 0 0 $ 66,400 66,400 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 $ 637,500 Cost of goods sold 296,000 Depreciation expense Loss on sale of equipment Income before taxes Gross profit Operating expenses (excluding depreciation) $ 143,400 Other gains (losses) 341,500 31,750 175,150 (16,125) 150,225 Income taxes expense Net income 39,650 $ 110,575 Assets Cash FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year $ 66,400 82,380 $ 84,500 61,625 262,800 Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable 292,156 1,320 2,115 442,256 411,040 146,500 119,000 (42,125) (51,500) $ 546,631 $ 478,540 Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions $ 64,141 $ 131,175 72,800 136,941 67,950 199,125 179,250 161,250 54,000 0 176,440 118,165 $ 546,631 $ 478,540 a. The loss on the cash sale of equipment was $16,125 (details in b). b. Sold equipment costing $79,875, with accumulated depreciation of $41,125, for $22,625 cash. c. Purchased equipment costing $107,375 by paying $52,000 cash and signing a long-term notes payable for the balance. d. Paid $50,525 cash to reduce the long-term notes payable. e. Issued 3,600 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $52,300. 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: Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0 0 0 $ 0 $ 0 Required: Prepare a complete statement of cash flows using a spreadsheet using the indirect method. Note: Enter all amounts as positive values. Balance sheet-debit Cash Accounts receivable Inventory Prepaid expenses Equipment Balance sheet-credit Accumulated depreciation-Equipment Accounts payable FORTEN COMPANY Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 Analysis of Changes December 31, Prior December 31, Year Debit Current Year Credit $ 84,500 61,625 262,800 2,115 119,000 530,040 51,500 131,175 Long-term notes payable 67,950 Common stock, $5 par value 161,250 Paid-in capital in excess of par value, common stock 0 Retained earnings 118,165 530,040 Statement of cash flows Operating activities Investing activities Financing activities Non cash investing and financing activities Purchase of equipment financed by long-term notes payable 0 0 $ 66,400 66,400 0
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
what is the difference and similarities between Pearson's r and Spearman's rho to determine if there is a relationship between variables
-
3. An owner leased property to a convalescent hospital. After the lease was entered into, it was discovered that a great deal of work would be required if the property were to be approved and used...
-
1. Why is it that the statement "all rhombuses are squares" is false, but the statement "all squares are rhombuses" is true? Use an example to help with your explanation. 2. Given two segments with...
-
1. Based on a simple, constant context, you will arrive at a stationary state for a unregulated, and then a regulated system. Assume that air resistance and friction for a car increase in the power...
-
Owens Corning makes different size Fibergias mats in its composite materials facility in Anderson, S. Carolina.3 For simplicity', consider only two products: light (3/4 ounce per square foot, 76...
-
An empty cannister of 0.002 m3 is filled with R-134a from a line flowing saturated liquid R-134a at 0C. The filling is done quickly so it is adiabatic. Find the final mass in the cannister and the...
-
Use discounted-cash-flow (DCF) models for decision making.
-
The Pacific Fruit Company in Problem 3-13 has designed its packaging process for boxes to hold a net weight (nominal value) of 9.0 oz of raisins with tolerances of 0.5 oz. Using the process mean and...
-
Consider how Star Valley, a popular ski resort, could use capital budgeting to decide whether the $9 million Snow Park Lodge expansion would be a good investment (Click the icon to view the expansion...
-
At the beginning of current year, Cole Company signed an eight-year noncancelable lease for a new machine, requiring P750,000 annual payments at the beginning of each year. The machine has a useful...
-
One of the forecasters below is making a bad decision which could lower the quality of the revenue baseline they forecast. Which one is it? A. Jamiya Forecaster decides to consult appropriate...
-
Two Brothers Moving prepared the following sales budget: Credit collections are 25% in the month of sale, 60% in the month following the sale, and 10% two months following the sale. The remaining 5%...
-
Selected transactions for Blossom Company are presented below in journal form (without explanations). Date Account Title Debit Credit May 5 Accounts Receivable 3,450 Service Revenue 3,450 12 Cash...
-
Organization that is known as a U.S.-based company has set the goal of becoming a key force in main European markets, including the United Kingdom, Germany, Spain, and Italy. This was to be achieved...
-
At very low temperatures the molar heat capacity of rock salt varies with temperature according to Debye's T law: C = k where k = 1940J/(mol K) and 0 = 281K. Part A How much heat is required to raise...
-
Organizations create a standard set of protective tools, such as encryption, firewalls, anti-virus software, intrusion-detection systems, and two-factor authentication. However, threat actors still...
-
3.16. For a system with non-identical service rates (see Sect. 3.5) and a limit of N jobs in the system (Eq. 3.13), obtain an expression for the mean service time per job, E[Ts], as a function of the...
-
Journalize the following transactions for Harlem Manufacturing. (a) Incurred direct labor costs of \($24,000\) for 3,000 hours. The standard labor cost was \($24,300\). (b) Assigned 3.000 direct...
-
Napier Company's standard labor cost of producing one unit of Product DD is 3.9 hours at the rate of \($12.00\) per hour. During August, 40,800 hours of labor are incurred at a cost of \($12.10\) per...
-
The follovving direct materials and direct labor data pertain to the operations of Juan Manufacturing Company for the month of August Instructions (a) Compute the total, price, and quantity variances...
Study smarter with the SolutionInn App