Question

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 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. PORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2012 67.900 83.890 293,656 1.330 446,776 145,500 (42.625) $549.651 $ 85,500 62,625 263.800 2.135 414060 120,000 (52,000) $482,060 Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Connon stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $132.675 65,141 13,600 1400 59.000 137.741 185,250 49.500 175.560 $549,651 $482,060 PORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold 5642,500 297,000

Answer 1

Solution

FORTEN COMPANY
Cash Flow Statement
For the ended december 31, 2017
Cash Flow from Operating Activities:
Net Income	$     110,175.00
Adjustments to reconcile net income to net cash provided by operations:
Loss on sale of Equipment	$        17,125.00
Depreciation expense	$        32,750.00
Increase in Accounts receivables	$     (21,265.00)
Increase in Inventory	$     (29,856.00)
Decrease in prepaid expense	$              805.00
Decrease in accounts payable	$     (67,534.00)
A. Cash Flow from Operating Activities		$         42,200.00
Cash Flow from Investing Activities:
Sale of Equipment	$        23,625.00
Purchase of Equipment	$     (54,000.00)
B. Cash flow from Investing Activities		$       (30,375.00)
Cash Flow from Financing Activities:
Issue of Common Stock	$        74,000.00
Dividend paid	$     (52,500.00)
Proceeds from short term notes payable	$          5,200.00
Retirement of long term notes payable	$     (56,125.00)
C. Cash Flow from Financing Activities		$       (29,425.00)
Increase (Decrease) in cash [A+B+C]		$       (17,600.00)
Add: cash at the beginning of the year		$         85,500.00
Cash at the end of the year		$         67,900.00