Required information Use the following information for the Problems below The following information applies to the questions displayed below] Forten Company, a merchandiser, recently completed its calendar-year 2018 operations. For the year,(0) all sales ane 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 initally debited to Prepaid Expenses. The company's income statement balance sheets, and additional information follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2018 and 2017 201 2018 AssetS Cash Accounts receivable InventorY Prepaid expenses Total curzent assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-cerm notes payable Total current liabilities Long-term notes payable Total 1iabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equsty 78,40092,500 69, 625 304,156 270, 800 2,275 478,416435,200 138, 500 127,000 94,460 1,400 (46 125) (55.500) $570,791$506,700 $ 72,141 $143,175 15, 7009.800 87,841152,975 67, 750 143,341220.725 55,500 200, 750178,750 0 6107-225 66,000 160, 700 $570,791$506,700 FORTEN COMPANY Total 1iabilities and equity $570, 791 $506, 700 FORTEN COMPANY Income Statement Year Ended December 31, 2018 Sales Cost of goods sold Gross profit Operating expenses $677,500 304.000 373, s00 s 39 750 Depreciation expense Other expenses Other gains (losses) 151.400 191.150 Loss on sale of equipment Income before taxes Income taxes expense Net income (24, 125) 158 225 50, 850 $107 375 Problem 12-3A Indirect: Statement of cash flows LO A1, P1, P2, P3 Additional Information on Year 2018 Transoctions o. The loss on the cash sale of equipment was $24125 (details in b) b. Sold equipment costing $103,875, with accumulated depreciation of $49125, for $30625 cash. c. Purchased equipment costing $115,375 by paying $68,000 cash and signing a long-term note p d. Borrowed $5,900 cash by signing a short-term note payable FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2018 Cash flows from operating activities Net income 107,375 Adjustments to reconcile net income to net cash provided by operations Income statement items not affecting cash Depreciation expense Loss on disposal of equipment 39,750 24,125 Changes in current assets and current liabilities Accounts receivable increase Inventory increase Prepaid expense decrease (24,835) (33,356) 875 (71,034) 5,900 Cash borrowed on short-term note Net cash provided by operating activities Cash received from sale of equipment $48,800 Cash flows from investing activities 11,500 Cash paid for equipment investir 11.500 Cash flows from financing activities Cash received from issuing stock Notes payable long-term increase Cash paid for dividends Net cash provided by financing activities Net increase (decrease) in cash Cash balance at December 31, 2017 Cash balance at December 31. 2018 60.300 60.300