Forten Company, a merchandiser, recently completed its calendar-year 2017 operat
ID: 2532091 • Letter: F
Question
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 $ 76,900 91,500 68,625 269,800 2,255 896432,180 92,950 302,656 1,390 126,000 139,500 (45,625 (55,000) $567,771 $503,180 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 $ 71,141 $141,675 9.600 15,400 86,541 142,54.1 198,750 151,27!5 56,00066,750 218,025 168,250 55,500 170,980 116,905 $567,771 $503,180 Total liabilities and equity FOR TENExplanation / Answer
Statement of cash flow Cash flows from operating activities net income 107,775 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense 38,750 loss on sale of Equipment 23,125 increase in account receivable -24325 increase in inventory -32856 Decrease in prepaid expense 865 Decrease in accounts payable -70534 net cash provided by operating activities 42,800 42,800 Cash from investing activities cash from sale of Equipment 29,625 cash for purchase of Equipment -66000 Cash used fro investing activities -36,375 -36375 Cash from financing activities Cash from short term notes payable 5,800 Cash paid for long term notes payable -59,125 Cash from stock issue 86000 paid cash dividend -53,700 Cash used for financing activity -21,025 -21,025 Net decrease in cash -14,600 Cash at the beginning og the year 91500 Cash at year end 76,900