Use the following information for the Problems below [The following information
ID: 2523494 • Letter: U
Question
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 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $ 66,400 84,500 61,625 262,800 2,115 411,040 119,000 51,500 $546,631 478,540 82,380 292,156 1,320 442,256 146,500 42,125 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 $ 64,141 131,175 8,200 139,375 59,750 199,125 13,300 77,441 59,500 136,941 184,750 161,250 118,165 $546,631 478,540 176,4460 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses 637,500 296,000 341,500 Depreciation expense $31,756 143,400 175,150 Other expenses Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income 150,225 39,650 $ 110,575 Problem 12-3A Indirect: Statement of cash flows LO A1, P1, P2, P3 Additional Information on Year 2017 TransactionsExplanation / Answer
Forten Company
Statement of Cash Flows
For the year Ended December 31,2017
Particulars Amount Amount Cash Flows from operating activities Net Income 110575 Adjustments top reconcile net income to net cash provided by operations: Depreciation Expense 31750 Accounts Receivable increase(82380-61625) -20755 Prepaid expense decrease(1320-2115) 795 Inventory Increase(292156-262800) -29356 Accounts Payable decrease(64141-131175) -67034 Loss on disposal of equipment 16125 -68475 Net cash provided by operating activities 42100 Cash Flow from Investing Activities Cash paid for equipment -52000 Cash received from sale of equipment 22625 Net Cash Flow from Investing activities -29375 Cash Flows from Financing activities Cash borrowed on short term note 5100 Cash paid on long term note -55625 Cash received from issuing stock (20*3600) 72000 Cash paid for dividends -52300 Net cash flow from Financing activities -30825 Net increase (decrease) in cash -18100 Cash balance at beginning of year 84500 Cash balance at end of year 66400