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 Comparative Balance Sheets December 31 |
|||||||||||
Current Year | Prior Year | ||||||||||
Assets | |||||||||||
Cash | $ | 66,400 | $ | 84,500 | |||||||
Accounts receivable | 82,380 | 61,625 | |||||||||
Inventory | 292,156 | 262,800 | |||||||||
Prepaid expenses | 1,320 | 2,115 | |||||||||
Total current assets | 442,256 | 411,040 | |||||||||
Equipment | 146,500 | 119,000 | |||||||||
Accum. depreciation—Equipment | (42,125 | ) | (51,500 | ) | |||||||
Total assets | $ | 546,631 | $ | 478,540 | |||||||
Liabilities and Equity | |||||||||||
Accounts payable | $ | 64,141 | $ | 131,175 | |||||||
Short-term notes payable | 13,300 | 8,200 | |||||||||
Total current liabilities | 77,441 | 139,375 | |||||||||
Long-term notes payable | 59,500 | 59,750 | |||||||||
Total liabilities | 136,941 | 199,125 | |||||||||
Equity | |||||||||||
Common stock, $5 par value | 179,250 | 161,250 | |||||||||
Paid-in capital in excess of par, common stock | 54,000 | 0 | |||||||||
Retained earnings | 176,440 | 118,165 | |||||||||
Total liabilities and equity | $ | 546,631 | $ | 478,540 | |||||||
FORTEN COMPANY Income Statement For Current Year Ended December 31 |
|||||||
Sales | $ | 637,500 | |||||
Cost of goods sold | 296,000 | ||||||
Gross profit | 341,500 | ||||||
Operating expenses | |||||||
Depreciation expense | $ | 31,750 | |||||
Other expenses | 143,400 | 175,150 | |||||
Other gains (losses) | |||||||
Loss on sale of equipment | (16,125 | ) | |||||
Income before taxes | 150,225 | ||||||
Income taxes expense | 39,650 | ||||||
Net income | $ | 110,575 | |||||
Additional Information on Current Year Transactions
Required:
Prepare a complete statement of cash flows using a spreadsheet
using the indirect method. (Enter all amounts as
positive values.)
ANSWER
FORTEN COMPANY | ||
Statement of Cash Flows | ||
For the Year ended December 31 | ||
Particulars | Details | Amount |
Cash Flow from Operating Activities: | ||
Net Income | $1,10,575.00 | |
Adjustments to reconcile net income to cash flow from operating activities: | ||
Depreciation | $31,750.00 | |
Loss on sale of Equipment | $16,125.00 | |
Increase in Accounts Receivables ($61625 - $82380) | -$20,755.00 | |
Increase in Inventory ($262800-292156) | -$29,356.00 | |
Decrease in Prepaid Expenses ($2115-1320) | $795.00 | |
Decrease In Accounts Payable ($64141 - $131175) | -$67,034.00 | |
Increase in Short term note payable ($13300-8200) | $5,100.00 | |
Total Adjustments | -$63,375.00 | |
Net Cash Flow From Operating Activities (A) | $47,200.00 | |
Cash Flow from Investing Activities: | ||
Cash Received from sale of Equipment | $22,625.00 | |
Purchase of Equipment (In cash) | -$52,000.00 | |
Net Cash Flow From Investing Activities (B) | -$29,375.00 | |
Cash Flow from Financing Activities: | ||
Repayment of Long Term Note Payable | -$55,625.00 | |
Cash received from issue of common stock (3600*$20) | $72,000.00 | |
Dividend paid | -$52,300.00 | |
Net Cash Flow From Financing Activities (C) | -$35,925.00 | |
Total Cash flow from all activities (A+B+C) | -$18,100.00 | |
Cash at the beginning of the year | $84,500.00 | |
Cash at the end of year | $66,400.00 |
_____________________________________________
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Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year,...
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...
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