Prepare a complete statement of cash flow using the indirect method for the current year Forten Company's current year income statement, comparative balance sheets, and additional information follow. For theyear, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) allpurchases of inventory are on credit, (4) all debits to ACcounts Payable reflect cash payments for inventory, and (5) OtherExpenses are paid in advance and are initially debited to Prepaid Expenses.FORTEN COMPANYComparative Balance SheetsDecember 31Current YearPrior YearAssets$ 67,90083,890293,6561,330446,776145,500(42,625)$ 549,651$ 85,50062,625263,8002,135414,060120,000(52,000)$ 482,060CashAccounts receivableInventoryPrepaid expensesTotal current assetsEquipmentAccum. depreciation-EquipmentTotal assetsLiabilities and EquityAccounts payableShort-term notes payableTotal current liabilities$ 65,14113,60078,74159,000$ 132,6758,400141,07560,750Long-term notes payableTotal liabilitiesEquityCommon stock, $5 par valuePaid-in capital in excess of par, common stockRetained earningsTotal liabilities and equity137,741201,825162, 250180,75055,500175,660$ 549,651117,985$ 482,060< Prev5 of 5Next >........ FORTEN COMPANYIncome StatementFor Current Year Ended December 31Sales$ 642,500297,000345,500Cost of goods soldGross profitOperating expensesDepreciation expenseother expensesother gains (losses)Loss on sale of equipmentIncome before taxesIncome taxes expense$32,750144,400177,150(17,125)151,22541,050Net income$ 110,175Additional Information on Current Year Transactionsa. The loss on the cash sale of equipment was $17,125 (details in b).b. Sold equipment costing $82,875, with accumulated depreciation of $42,125, for $23,625 cash.c. Purchased equipment costing $108,375 by paying $54,000 cash and signing a long-term note payable for the balance.d. Borrowed $5,200 cash by signing a short-term note payable.e. Paid $56,125 cash to reduce the long-term notes payable.f. Issued 3,700 shares of common stock for $20 cash per share.g. Declared and paid cash dividends of $52,500.Prev5 of 5Next

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Description: Prepare a complete statement of cash flow using the indirect method for the current year Forten Company's current year income statement, comparative balance sheets, and additional information follow. For theyear, (1) all sales are credit sales, (2)

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Answered: Prepare a complete statement of cash…

Business

Accounting

Prepare a complete statement of cash flow using the indirect method for the current ye

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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. Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated depreciation-Equipment Total assets 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 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Other gains (losses). Loss on sale of equipment Income before…
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 COMPANYComparative Balance SheetsDecember 31 Current Year Prior Year Assets Cash $ 49,800 $ 73,500 Accounts receivable 65,810 50,625 Inventory 275,656 251,800 Prepaid expenses 1,250 1,875 Total current assets 392,516 377,800 Equipment 157,500 108,000 Accum. depreciation—Equipment (36,625 ) (46,000 ) Total assets $ 513,391 $ 439,800 Liabilities and Equity…
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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 COMPANYComparative Balance SheetsDecember 31 Current Year Prior Year Assets Cash $ 49,800 $ 73,500 Accounts receivable 65,810 50,625 Inventory 275,656 251,800 Prepaid expenses 1,250 1,875 Total current assets 392,516 377,800 Equipment 157,500 108,000 Accum. depreciation—Equipment (36,625 ) (46,000 ) Total assets $ 513,391 $ 439,800 Liabilities and Equity…
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 COMPANYComparative Balance SheetsDecember 31 Current Year Prior Year Assets Cash $ 49,800 $ 73,500 Accounts receivable 65,810 50,625 Inventory 275,656 251,800 Prepaid expenses 1,250 1,875 Total current assets 392,516 377,800 Equipment 157,500 108,000 Accum. depreciation—Equipment (36,625 ) (46,000 ) Total assets $ 513,391 $ 439,800 Liabilities and Equity…
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