Question

5A G Seved Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not ing 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 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) oth Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Pria $28.400 460 156 A Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation Equipment Total assets Liabilities and Equity Ante PAVAhle S 92.500 69.625 270,800 2.275 435,200 127.000 55,500 $506,700 $141.175 Prey 2 of Next

Answer 1

FORTEN COMPANY
Statement of cash flows
For the year ended December 31
Cash flow from operating activities:
Net Income		$107,375
Adjustments to reconcile net income to net cash provided by operations:
Depreciation	$39,750
Loss on sale of equipment	$24,125
Increase in Accounts receivable ($69625-$94460)	($24,835)
Increase in Inventory ($270800-$304156)	($33,356)
Decrease in prepaid ($2275-$1400)	$875
Decrease in Accounts payable ($72141-$143175)	($71,034)
Increase in short term note ($15700-$9800)	$5,900
Total adjustment		($58,575)
Net cash flow from operating activities (A)		$48,800
Cash flow from investing activities:
Cash received from sale of equipment	$30,625
Purchase of equipment	($68,000)
Net cash from investing activities (B)		($37,375)
Cash flow from financing activities:
Repayment of Long term note payable	($59,625)
Issue of common stock (4,400 × $20)	$88,000
Dividend paid	($53,900)
Net Cash flow from financing activities (C)		($25,525)
Total Cash flow (A+B+C)		($14,100)
Cash at the beginning of the year		$92,500
Cash at the end of the year		$78,400