Question

Required information [The following information applies to the questions displayed below.) Forten Companys current year inco$ 662,500 301,000 361,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross pFORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Adjustments toAdditional Information on Current Year Transactions a. The loss on the cash sale of equipment was $21,125 (details in b). b.Required: Prepare a complete statement of cash flows using a spreadsheet using the indirect method. (Enter all amounts as posStatement of cash flows Operating activities Investing activities Financing activities Non cash investing and financing activRequired: Prepare a complete statement of cash flows using the direct method. (Amounts to be deducted should be indicated wit

0 0
Add a comment Improve this question Transcribed image text
Answer #1
FORTEN COMPANY
Statement of Cash Flows (Indirect)
For Year Ended December 31, 2013
Cash flows from operating activities
Net Income $ 108,575
Adjustments to reconcile net income to net cash provided by operations:
Depreciation expense $   36,750
Accounts receivable increase $ (23,305) 89930-66625
Inventory increase $ (31,856) 299656-267800
Prepaid expense decrease $         845 1370-2215
Accounts payable decrease $ (69,534) 69141-138675
Loss on disposal of equipment $   21,125
Net cash provided by operating activities $ 42,600
Cash flows from investing activities
Cash paid for equipment $ (62,000)
Cash received from sale of equipment $   27,625
Net cash used in investing activities $ (34,375)
Cash flows from financing activities:
Cash borrowed on short-term note $      5,600
Cash paid on long-term note $ (58,125)
Cash received from issuing stock $   82,000
Cash paid for dividends $ (53,300)
Net cash used in financing activities $ (23,825)
Net increase (decrease) in cash $ (15,600)
Cash balance at beginning of year $ 89,500
Cash balance at end of year $ 73,900
Non cash investing financing activities
Note issued for purchase of equipment 50375
FORTEN COMPANY
Spreadsheet for Statement of Cash Flows
For Year Ended December 31, 2013
Analysis of Changes
2016 Debit Credit 2017
Balance sheet—debits
   Cash $89,500 $73,900
   Accounts receivable 66,625 (b) $23,305 $89,930
   Merchandise inventory 267,800 (c) $31,856 $299,656
   Prepaid expenses 2,215 (d) $845 $1,370
   Equipment 124,000 (h) 112,375 (g) 94,875 $141,500
$550,140 $606,356
Balance sheet--credits
   Accum. depreciation—Equip. $54,000 (g) 46,125 (f) 36,750 $44,625
   Accounts payable 138,675 (e) 69,534 69,141
   Short-term notes payable 9,200 (j) 5,600 14,800
   Long-term notes payable 64,750 (k) 58,125 (i) 50,375 57,000
   Common stock, $5 par value 166,250 (l) 20,500 186,750
   Paid-in capital in excess of 0 (l) 61,500 61,500
      par value, common stock
   Retained earnings 117,265 (m) 53,300 (a) 108,575 172,540
$550,140 $606,356
Statement of cash flows
Operating activities
   Net income (a) 108,575
   Increase in accts. receivable (b) 23,305
   Increase in merch. inventory (c) 31,856
   Decrease in prepaid expenses (d) $845
   Decrease in accounts payable (e) 69,534
   Depreciation expense (f) 36,750
   Loss on sale of equipment (g) 21,125
Investing activities
   Receipt from sale of equipment (g) 27,625
   Payment to purchase equipment (h) 62,000
Financing activities
   Borrowed on short-term note (j) 5,600
   Payment on long-term note (k) 58,125
   Issued common stock for cash (l) 82,000
   Payments of cash dividends (m) 53,300
Noncash investing and financing activities
   Purchase of equip. financed
      by long-term note payable (i) 50,375 (h) 50,375
$727,515 $727,515
FORTEN COMPANY
Statement of Cash Flows (Direct)
For Year Ended December 31, 2013
Cash flows from operating activities
Cash received from customers $ 639,195
cash paid for merchandisr $ (402,390)
Cash paid for other expenses $ (147,555)
Cash paid for taxes $   (46,650)
Net cash provided by operating activities $ 42,600
Cash flows from investing activities
Cash paid for equipment $   (62,000)
Cash received from sale of equipment $     27,625
Net cash used in investing activities $ (34,375)
Cash flows from financing activities:
Cash borrowed on short-term note $       5,600
Cash paid on long-term note $   (58,125)
Cash received from issuing stock $     82,000
Cash paid for dividends $   (53,300)
Net cash used in financing activities $ (23,825)
Net increase (decrease) in cash $ (15,600)
Cash balance at beginning of year $ 89,500
Cash balance at end of year $ 73,900

Working:

Accounts receivable
Balance 66625
sales 662500 cash paid 639195
closing balance 89930
Inventory
Balance 267800
Purchases 332856 cost of goods sold 301000
closing balance 299656
Accounts Payable
balance 138675
cash paid 402390 Purchases 332856
balance 69141
Expenses
Balance 2215
cash paid 147555 expenses 148400
closing balance 1370
Add a comment
Know the answer?
Add Answer to:
Required information [The following information applies to the questions displayed below.) Forten Company's current year income...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Required information (The following information applies to the questions displayed below.) Forten Company's current year income...

    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...

  • Required information [The following information applies to the questions displayed below.] Forten Company's current year income...

    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...

  • Required Information [The following information applies to the questions displayed below.) Forten Company's current year income...

    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...

  • Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year, (1) all sales...

    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...

  • Required information [The following information applies to the questions displayed below.] Forten Company's current year income...

    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...

  • Required information (The following information applies to the questions displayed below.) Forten Company's current year income...

    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...

  • Required information [The following information applies to the questions displayed below.) Forten Company's current year income...

    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...

  • Required information (The following information applies to the questions displayed below.) Forten Company's current year income...

    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...

  • Required information (The following information applies to the questions displayed below.) Forten Company's current year income...

    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...

  • The following information applies to the questions displayed below.) Forten Company's current year Income statement, comparative...

    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 pald in advance and are initially debited to Prepaid Expenses. FORTEN COMPANY Comparative Balance...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT