Problem 12-2AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4 Forten Company
ID: 2446634 • Letter: P
Question
Problem 12-2AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4
Forten Company, a merchandiser, recently completed its calendar-year 2013 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 balance sheets and income statement follow.
Sold equipment costing $46,875, with accumulated depreciation of $30,250, for $11,500 cash. This yielded a loss of $5,125.
Purchased equipment costing $98,375 by paying $35,000 cash and (i.) by signing a long-term note payable for the balance.
Prepare a complete statement of cash flows using a spreadsheet; report its operating activities using the indirect method. (Enter all amounts as positive values.)
Forten Company
Spreadsheet for statement of Cash Flows
For Year Ended December 31, 2013
Balance sheet-debit balance accounts - Dec. 31, 2012 - Debit - Credit - Dec. 31, 2013
Cash $74000.00 - $ - $ - $49800.00
Accounts receivable $56000.00 - $ - $ - $
Merchandise inventory $251,500.00 - $ - $ - $
Prepaid expenses $1,800.00 - $ - $ - $
Equipment $106,000.00 - $ - $ - $
Total: $489,300.00 - $49,000.00
BALANCE Sheet-credit balance accounts Dec. 31, 2012 - Debit - Credit
Accumulated depreciation-Equipment $52,000.00- - $ - $
Accounts payable $113,000.00- - $ -$
Short-term notes payable $7,000.00- -$ -$
Long-term notes payable $48,000.00- - $ -$
Common stock, $5 par value $150,250.00 - -$ -$
Paid-In capital in excess of par value common stock - $0.00 -$ -$
Retained earnings $119,050.00 -$ -$
Total: $489,300.00 -$
STATEMENT OF CASH FLOWS
OPERATING ACTIVITIES Debit Credit
Net Income -$ -$
Increase in accounts receivable -$ -$
Increase in merchandise 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 -$ -$
Payments of cash dividends -$ -$
NON CASH INVESTING & FINANCING ACTIVITIES
Purchas of equpment financed by long-term note payable -$ -$
Total: -$ -$
Forten Company, a merchandiser, recently completed its calendar-year 2013 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 balance sheets and income statement follow.