Question

Required Information Use the following information for the Problems below. [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 Ex and are initially debited to Prepaid Expenses. The company's income statement and balance sheets follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 $ 52,900 68,810 278,656 1,270 401,636 155,500 (37,625) $519,511 $ 75,500 52,625 253,800 1,995 383,920 110,000 (47,000) 446,920 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, $5 par value Paid in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 55,141 10,600 65,741 64,000 129,741 $117,675 6,400 124,075 50,750 174,825 152,250 166,750 39,500 183,520 $519,511 119,845 $446,920

Answer 1

А Amount ($) 114,175 27,050 141,225 FORTEN COMPANY Cash Flow Statement for the Year Ending 31st Dec, 2017 Indirect Method 5 Particulars 6 Cash Flows From Operating Activities 7 Net Income 8 Add: Income Tax 9 Income Before Tax 10 11 Adjustments :- 12 Add:Depreciation For the year 13 Add :Loss on sale of Equipment 14 Operating Profit before working capital changes 15 Changes in Working Capital :- 16 Increase in Inventory 17 Increase in Account Receivable 18 Decrease in Prepaid Expenses 19 Increase in Short term notes payable 20 Decrease in Account Payable 21 Total 22,750 7,125 171,100 (24,856) (16,185) 725 4,200 (62,534) 72,450 23 Less : Income Tax Paid 24 Net Cash Flow From Operating Activities (A) (27,050) 45,400

25 13,625 (34,000) (20,375) 54,000 (51,125) (50,500) (47,625) 26 Cash Flows From Investing Activities 27 Sale of Equipment 28 Purchase of equipment (W Note 1) 29 Net Cash Flow From Investing Activities (B) 30 31 Cash Flows From Financing Activities 32 Share Capital Issued (2700 shares $20 per share) 33 Cash paid for Long term note payable (W Note 1) 34 Dividend Paid 35 Net Cash Flow From Financing Activities (C) 36 37 Net Increase (Decrease) in cash (A+B+C) 38 Cash Balance at the beginning of the year 39 Cash Balance at the end of the year 40 41 42 W Note 1: 43 Cost of Equipment Purchased 44 45 Cash Paid (Investing Activity) 46 Long term note Paid (Financing Activity) 47 Long term note Payable ( Non Cash Activity, Not included in Cash Flow) 48 49 (22,600) 75,500 52,900 $98,375 $34,000 $51,125 $13,250 98,375