Required information [The following information applies to the questions displayed below.] 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, (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. FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 72,400 $ 88,500 Accounts receivable 88,420 65,625 Inventory 298,156 266,800 Prepaid expenses 1,360 2,195 Total current assets 460,336 423,120 Equipment 142,500 123,000 Accumulated depreciation—Equipment (44,125) (53,500) Total assets $ 558,711 $ 492,620 Liabilities and Equity Accounts payable $ 68,141 $ 137,175 Long-term notes payable 72,000 72,750 Total liabilities 140,141 209,925 Equity Common stock, $5 par value 185,250 165,250 Paid-in capital in excess of par, common stock 60,000 0 Retained earnings 173,320 117,445 Total liabilities and equity $ 558,711 $ 492,620 Additional Information on Current Year Transactions The loss on the cash sale of equipment was $20,125 (details in b). Sold equipment costing $91,875, with accumulated depreciation of $45,125, for $26,625 cash. Purchased equipment costing $111,375 by paying $60,000 cash and signing a long-term notes payable for the balance. Paid $52,125 cash to reduce the long-term notes payable. Issued 4,000 shares of common stock for $20 cash per share. Declared and paid cash dividends of $53,100. Problem 16-5AB (Algo) Direct: Statement of cash flows LO P5
Required:
Prepare a complete statement of cash flows using the direct method for the current year. (Amounts to be deducted should be indicated with a minus sign.)
FORTEN COMPANY
Statement of Cash Flows
For Current Year Ended December 31
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operations:
Cash flows from investing activities
Cash flows from financing activities:
Net increase (decrease) in cash
Cash balance at December 31, prior year
Cash balance at December 31, current year