Forten company current year income statement, comparative balance sheets and additional information follow. For the year all sales are credit sales. all credits to accounts recievable reflect cash reciepts from customers. all purchases of inventory are on credit. all debits to account payable reflectr cash payments for inventory and other expenses are paid in advance and are initially debited to prepaid expenses.
Assets 2013 2012
Cash $70,944 $72,000
Accounts receivable 79,125 61,125
Merchandise inventory 259,906 230,800
Prepaid expenses 1,600 2,100
Equipment 162,600 120,000
Accum- depreciation - Equipment (53,800) (60,000)
Total assets $520,375 $426,025
Liabilities and Equity
Accounts payable $58,075 $111,200
Short-term notes payable 10,000 6,000
Long-term notes payable 24,175 43,000
Common stock, $5 par value 167,500 150,000
Paid-in capital excess of par,
common stock 52,500 0
Retained earnings 206,025 115,825
Total liabilities and equity $520,375 $426,025
FORTEN COMPANY Income Statement For Year Ended December 31, 2013
Sales $635,000
Cost of goods sold 306,000
Gross profit 329,000
operating expenses
Depreciation expense $20,000
Other expenses 128,300 148,300
Other gains (losses)
Loss on sale of equipment (4,500)
Income before taxes 176,200
Income taxes expense 31,000
Net income $145,200
Additional information on Year 2013 transactions:
a. The loss on the cash sale of equipment was $4,500 (details in b)
b. Sold equipment costing $45,800 with accumulated depreciation of $26,200, for $15,100 cash.
c. Purchased equipment costing $88,300 by paying $63,000 cash and signing a long-term note payable for the balance.
d. Borrowed $4,000 cash by signing a short-term note payable.
e. Paid $44,125 cash by signing a short-term note payable.
f. Issued 3,500 shares of common stock for $20 cash per share.
g. Declared and paid cash dividends of $53,000.
Required
Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign)
