! Required information Use the following information for the Problems below. [The following information applies to the questions displayed below.] 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 $ 61,900 77,850 287,656 1,290 428,696 149,500 (40,625) $537,571 $ 81,500 58,625 259,800 2,055 401,980 116,000 (50,000) $ 467, 980 Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities 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 $ 61,141 12,400 73,541 61,000 134,541 $126,675 7,600 134,275 56,750 191,025 174,750 49,500 178,780 $537,571 158, 250 0 118,705 $ 467,980 $622,500 293,000 329,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 28,750 Other expenses 140,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 169, 150 (13, 125) 147, 225 35, 450 $111,775 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $13,125 (details in b). b. Sold equipment costing $70,875, with accumulated depreciation of $38,125, for $19,625 cash. c. Purchased equipment costing $104,375 by paying $46,000 cash and signing a long-term note payable for the balance. d. Borrowed $4,800 cash by signing a short-term note payable. e. Paid $54,125 cash to reduce the long-term notes payable. f. Issued 3,300 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $51,700. Problem 12-4AA Indirect: Cash flows spreadsheet LO P4 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 December 31, Prior Debit Year Credit December 31, Current Year Balance sheet-debit Cash $ 81,500 $ 61,900 Accounts receivable 58,625 19,225 259,800 27,856 Inventory Prepaid expenses Equipment 77,850 287,656 1,290 2,055 765 33,500 116,000 517,980 82,500 511,196 $ $ Balance sheet-credit $ 50,000 $ 28,750 38,125 $ 65,534 Accumulated depreciation Equipment Accounts payable Short-term notes payable Long-term notes payable Common stock, $5 par value Paid-in capital in excess of par value, common stock Retained earnings 126,675 7,600 56,750 158,250 40,625 61,141 12,400 61,000 4,800 58,375 54,125 0 118,705 517,980 $ $ 175,166 Statement of cash flows Operating activities Net income Increase in accounts receivable Increase in inventory Decrease in prepaid expenses Decrease in accounts payable Depreciation expense Loss on sale of equipment Investing activities Receipt from sale of equipment Payment to purchase equipment Financing activities Borrowed on short-term note Payment on long-term note Issued common stock for cash Payment of cash dividends Non cash investing and financing activities Purchase of equipment financed by long-term note payable $ 204,865 $ 126,190