Forten Company’s current year Income statement, comparative balance sheets, and additional Information follow. For the year. (1) all sales…

Forten Company’s current year Income statement, comparative balance sheets, and additional Information follow. For the year. (1) all sales…

Question:

Don't use plagiarized sources. Get Your Custom Assignment on
Forten Company’s current year Income statement, comparative balance sheets, and additional Information follow. For the year. (1) all sales…
From as Little as $13/Page

  

Transcribed Image Text:

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.
Sales
Cost of goods sold
Gross profit
Operating expenses (excluding depreciation)
Depreciation expense
Other gains (losses)
Loss on sale of equipment
Income before taxes
Income taxes expense
Net Income
Assets
Cash
Accounts receivable
Inventory
Prepaid expenses
Total current assets
FORTEN COMPANY
Income Statement
For Current Year Ended December 31.
Total assets
Equipment
Accumulated depreciation-Equipment
Liabilities and Equity
Accounts payable
Long-term notes payable
Total liabilities
Equity
Common stock, $5 par value
FORTEN COMPANY
Comparative Balance Sheets
December 31
$ 150,400
38,750
Paid-in capital in excess of par, common stock
Retained earnings
Total liabilities and equity
$ 672,500
303,000
369,500
189,150
(23,125)
157,225
49,450
$ 187,775
Current Year: Prior Year
$ 91,500
$ 76,900
92,950
68,625
302,656
269,880
2,255
1,390
473,896
139,500
(45,625)
$ 567,771
$ 71,141
71,400
142,541
189,750
64,500
178,988
$ 567,771
d. Pald $53,325 cash to reduce the long-term notes payable.
e. Issued 4,300 shares of common stock for $20 cash per share.
f. Declared and paid cash dividends of $53,700.
432,188
126,000
(55,000)
$ 503,188
$ 141,675
76,350
218,025
168,250
8
116,905
$ 503,180
Additional Information on Current Year Transactions
a. The loss on the cash sale of equipment was $23,125 (detalls in b).
b. Sold equipment costing $100,875, with accumulated depreciation of $48,125, for $29,625 cash.
c. Purchased equipment costing $114,375 by paying $66,000 cash and signing a long-term notes payable for the
balance. Required:
1. Prepare a complete statement of cash flows using the Indirect method for the current year.
Note: Amounts to be deducted should be indicated with a minus sign.

Expert Answer:

Answer rating: 100% (QA)

A cash flow statement is prepared with the help of income statement account and balance sheet accoun
View the full answer