Question

Forten Company's current year Income statement, comparative balance sheets, and additional Information follow. For the year, () 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 Comparative Balance Sheets December 31 Current Year Prior Year 79,988 95,970 385,656 1,410 482,936 137,500 (46,625) 93, see 70,625 271,880 2,295 438, 220 128,00 (56,000) $ 510,22e $ 573,811 Assets 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 Common stock, 55 par value Paid in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 73,141 16,eee 89,141 55,000 144. 141 $ 144,675 10, eee 154,675 223,425 170.250 192,750 67,500 169,420 $ 573,511 116,545 $ 510,220 FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 682,500 305,000 377,500 Cost of goods sold Gross profit Operating expenses Depreciation expense other expenses Other gains (losses LOSS on sale of equipment Income before Income taxes expense 19240 a 192,150 Rencome

Answer 1

Statement of cash flow
Cash flows from operating activities
net income					106,975
Adjustments to reconcile net income to net
cash provided by operations:
Depreciation expense					40,750
loss on sale of Equipment					25,125
increase in account receivable					-25345
increase in inventory					-33856
Decrease in prepaid expense					885
Decrease in accounts payable					-71534
net cash provided by operating activities						43,000
Cash from investing activities
cash from sale of Equipment					31,625
cash for purchase of Equipment					-70000
Cash used fro investing activities						-38,375
Cash from financing activities
Cash from short term notes payable					6,000
Cash paid for long term notes payable					-60,125
Cash from stock issue					90000
paid cash dividend					-54,100
Cash used for financing activity						-18,225
Net decrease in cash						-13,600
Cash at the beginning og the year						93500
Cash at year end						79,900
non cash financing and investing activity
purchase of equipment financed by long term notes payable						46375