Required information Use the following information for the Problems below. (Algo) [The following information applies to the questions displayed below.] Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Use the following information for the Problems below. (Algo) [The following information applies to the questions displayed below.] Lansing Company's current-year income statement and selected balance sheet data at December 31 of the current and prior years follow. LANSING COMPANY Income Statement For Current Year Ended December 31 Sales revenue $ 121,200 Expenses Cost of goods sold 50,008 Depreciation expense 16,000 salaries expense 26,088 Rent expense 5,800 Insurance expense 4,688 Interest expense 4,488 Utilities expense 3,686 Met income $ 6,808 LANSING COMPANY Selected Balance Sheet Accounts At December 31 Current Year Prior Year Accounts receivable % 6,400 $ 7,400 Inventory 2,780 1,948 Accounts payable 5,200 6,289 Salaries payable 1,240 73@ Utilities payable 330 242 Prepaid insurance 340 442 Prepaid rent 380 268 Required: Prepare the operating activities section of the statement of cash flows using the direct method for the current year. Note: Amounts to be deducted should be indicated with a minus sign. Cash flows from operating activities 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 % 647,588 Cost of goods sold 298,008 Gross profit 349,509 Operating expenses (excluding depreciation) 145,408 Depreciation expense 33,758 179,158 Other gains (losses) Loss on sale of equipment 18,125) Income hefore taxes 152,225 Income taxes expense 42,458 Net incoms $ 189,775 FORTEN COMPANY Comparative Balance Sheets Dacember 31 Current Year Prior Year Assets Cash $ 69,400 $ 86,500 Accounts receivable 85,488 63,625 Inventory 295,156 264,388 Prepaid expenses 1,348 2,155 Total current assets 451,296 417,038 Equipment 144,508 121,889 Accumulated depreciationEquipment (43,135) (52,508) Total assets % 552,671 % 485,580 Liabilities and Equity Accounts payable $ 56,141 $ 134,175 Long-term notes payable 72,488 78,358 Total liabilities 138,541 2@4,525 Equity Common stock, $5 par value 182,258 163,258 Paid-in capital in excess of par, common stock 57,0808 a Retained earnings 174,888 117,885 Total liabilities and equity $ 552,671 $ 485,580 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $18125 (details in b). b. Sold equipment costing $85,875, with accumulated depreciation of $43125, for $24,625 cash. c. Purchased equipment costing $109,375 by paying $56,000 cash and signing a long-term notes payable for the balance. d. Paid $51,325 cash to reduce the long-term notes payable. e. Issued 3,800 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $52,700. a. The loss on the cash sale of equipment was $18125 (details in b). b. Sold equipment costing $85,875, with accumulated depreciation of $43125, for $24,625 cash. c. Purchased equipment costing $109,375 by paying $56,000 cash and signing a long-term notes payable for the balance. d. Paid $51,325 cash to reduce the long-term notes payable. e. Issued 3,800 shares of common stock for $20 cash per share. f. Declared and paid cash dividends of $52,700. Cash flows frem operating activities 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 frem financing activities: Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year H Required: Prepare a complete statement of cash flows using the direct method. Note: Amounts to be deducted should be indicated with a minus sign. Cash flows from operating activities increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year = ol ] o W W - w i = = = = 2 2 Il 7 = = o o 3 3 = 3 @ 0 = in o, = S5 S = 0 w wm g =2 - & & & &