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 2017 operations. 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. The company's income statement and balance sheets follow FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 $ 60,400 76,340 286,156 1,280 424,176 150,500 (40,125) $ 534,551 $ 80,500 57,625 258,800 2,035 398,960 115,000 (49,500) $ 464,460 Assets Cash 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 $ 60,141 - 12,100 72,241 61,500 133,741 $ 125,175 7,400 132,575 55,750 188,325 157,250 176,750 44,500 179,560 $ 534,551 118,885 $ 464,460 $ 617,500 292,000 325,500 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $ 27,750 Depreciation expense 139,400 Other expenses Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 167,150 (12,125) 146,225 34,050 $ 112,175 Problem 12-3A Indirect: Statement of cash flows LO A1, P1, P2, P3 Additional Information on Year 2017 Transactions a. The loss on the cash sale of equipment was $12,125 (details in b) b. Sold equipment costing $67,875, with accumulated depreciation of $37125, for $18,625 cash c. Purchased equipment costing $103,375 by paying $44,000 tash and signing a long-term note payable for the balance. d. Borrowed $4,700 cash by signing a short-term note payable. e. Paid $53,625 cash to reduce the long-term notes payable. f. Issued 3,200 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $51,500. Required information Required: 1. Prepare a complete statement of cash flows, report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Not income 112.175 Adjustments to reconcile net income to net cash provided by operations Depreciation expense 27.750 EUROLIURE $ 139,925 Cash flows from investing activities 0 Cash flows from financing activities: Net increase (decrease) in cash Cash balance at beginning of year $ 139,925