Question

Chapter 12 Homework G Saved Required information The following information applies to the questions displayed below.] 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 orn credit, (4) all debits to Accounts Payable reflcct cash payments for inventory, and (5) Other Expenses are paid in advancc and are initially debited to Prepaid Expenses. The company's income statement and balance sheets follow points eBook Print References FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash Accounts receivable Tnvenlory lrepaid expenses TolH Current assets Equipment Accum. depreciation qipment Total assets 63, 400 82, 500 59, 625 260, 800 2, 075 405, 000 117, 000 50, 500) S 471, 500 79, 360 2R9, 156 1, 300 433, 216 118, 500 (41, 125) $ 540, 59 Liabililies and Equily ccounts payablo Short term nates payable Total current 1iabilitios Long em noles nayahle Total liabilities Equity Comman stock, $5 par value Paid-in capital in excess of par, common stock Retained carnings Total liabilitios and cquity 62, 111 S128, 175 7, 800 12. 700 71, 811 0, 500 135, 341 135 1 57, 750 180, 750 16, b00 178, 000 540591 159, 250 S 471, 500 , Chapter 12 Homework 6 Saved Required Informatlon d. Borrowed $4,900 cash by signing a short-term note payable e. Paid $54,625 cash to reduce the long-term notes payable f. Issued 3,400 shares of common stock for $20 cash per share g. Declared and paid cash dividends of $51,900. points Required 1. 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.) eBook FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 Print References Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations 0 Cash flows from investing activities 0 Cash flows from financing activities 0 0 Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year

Answer 1

FORTEN COMPANY
Statement of Cash Flows
For Year Ended December 31, 2017
Cash flow From operating Activities:
Net income		111375
Adjustment to reconcile net income tp net cash provided by operations:
Depreciation expense	29750
Loss on sale of equipment	14125
Increase in accounts receivable (59625-79360)	-19735
Increase in inventory (59625-79360)	-28356
Decrease in prepaid expense (2075-1300)	775
Decrease in accounts payable (62141-128175)	-66034	-69475
Net cash provided by operating activity (A)		41900
cash flow from Investing activities:
Sale of equipment	20625
Purchase of equipment	-48000
Net cash used by Investing activities (B)		-27375
Cash flow from Financing activities:
Proceed from issuance of common stock (3400*20)	68000
Payment of Dividend	-51900
Proceeds from issuance of short term notes payable	4900
Payment of long term notes payable	-54625
Net cash used by Financing activities (C )		-33625
Net decrease in cash (A+B+C)		-19100
Add: Cash balance at beginning of year		82500
Cash balance at end of year		63400