Question

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 pald in advance and are initially debited to Prepaid Expenses. FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year R $ 66,400 82,380 292,156 1,320 442,256 146,500 (42,125) $546,631 $ 84,500 61,625 262,800 2,115 411,040 119,000 (51.500) $478,540 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Recounts 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 $ 64,141 13300 77.441 59.500 136,941 $131,175 3,200 139,375 59,750 199,125 161,250 179,250 54,000 176,440 $546,631 118,165 $478,540 $637,500 296,000 341,500 FORTEN COMPANY Income Statement For Current Year Ended December 31 sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 31,750 Other expenses 143,400 Other gains (loosea) Losa on sale of equipment Income bofore taxes Income taxes expense Set income 175,150 (16.125) 150,225 39,650 $110,575

Answer 1

FORTEN COMPANY Spreadsheet for Statement of Cash Flows—Indirect Method For Year Ended December 31, 2015
	December 31	Analysis of changes		December 31
	Prior Year	Debit	Credit	Current Year
Balance Sheet—Debit Bal. Accounts
Cash	84500			66400
Account receivable	61625	20755		82380
Inventory	262800	29356		292156
Prepaid expenses	2115		795	1320
Equipment	119000	107375	79875	146500
	530040			588756
Balance Sheet—Credit Bal. Accounts
Accumulated depreciation	51500	41125	31750	42125
Account payable	131175	67034		64141
Short-term notes payable	8200		5100	13300
Long-term notes payable	59750	55625	55375	59500
Common stock, $5 par value	161250		18000	179250
Paid in capital in excess of par, common stock	0		54000	54000
Retained earnings	118165	52300	110575	176440
	530040			588756
Statement of cash flows
Operating activities
Net income		110575
Increase in accounts receivable			20755
Increase in inventory			29356
Increase in prepaid expenses		795
Decrease in accounts payable			67034
Decrease in interest payable
Depreciation expense		31750
Loss on sale of plant assets		16125
Investing activities
Receipts from sale of plant assets		22625
Purchase of equipment			52000
Financing activities
Proceeds from short term loan		5100
Receipts from issuing stock		72000
Payment of cash dividends			52300
Repayment of long term debt			55625
Noncash Investing and Financing Activities
Purchase of plant assets with notes		55375	55375
		687915	687915

84500-66400 = 18100

61625-82380 = -20755

262800-292156 = - 29356

2116-1320 = 795

119000+107375-79785 = 146500

51500+31750-41125 = 42125

131175-64141 = 67034

8200-13300 = -5100

107375-52000= 55375

59750+55375-55625=59500

118165+110575-52300 = 176440