Required: 1. Prepare a complete statement of cash flows using the indirect method for the current year. (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 Net income Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Depreciation expense Changes in current assets and current liabilities Increase in accounts receivable Increase in inventory Decrease in prepaid expenses $ 114,575 21,750 (15,685) (24,356) 725 (62,034) Decrease in accounts payable Net cash provided by operating activities Cash flows from investing activities Cash paid for equipment (32,000) Cash received from sale of equipment 12,625 Net cash used in investing activities Cash flows from financing activities: Cash paid on long-term notes Cash received from issuing stock Cash paid for dividends Net cash used in financing activities Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 34,975 (19,375) (46,525) 52,000 (50,300) (44,825) $ (29,225) 74,500 $ 45,275