Forten Company, a merchandiser, recently completed its calendar-year 2018 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 Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s income statement, balance sheets, and additional information follow.
FORTEN COMPANY Comparative Balance Sheets December 31, 2018 and 2017 |
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2018 | 2017 | ||||||
Assets | |||||||
Cash | $ | 49,800 | $ | 73,500 | |||
Accounts receivable | 65,810 | 50,625 | |||||
Inventory | 275,656 | 251,800 | |||||
Prepaid expenses | 1,250 | 1,875 | |||||
Total current assets | 392,516 | 377,800 | |||||
Equipment | 157,500 | 108,000 | |||||
Accum. depreciation—Equipment | (36,625 | ) | (46,000 | ) | |||
Total assets | $ | 513,391 | $ | 439,800 | |||
Liabilities and Equity | |||||||
Accounts payable | $ | 53,141 | $ | 114,675 | |||
Short-term notes payable | 10,000 | 6,000 | |||||
Total current liabilities | 63,141 | 120,675 | |||||
Long-term notes payable | 65,000 | 48,750 | |||||
Total liabilities | 128,141 | 169,425 | |||||
Equity | |||||||
Common stock, $5 par value | 162,750 | 150,250 | |||||
Paid-in capital in excess of par, common stock | 37,500 | 0 | |||||
Retained earnings | 185,000 | 120,125 | |||||
Total liabilities and equity | $ | 513,391 | $ | 439,800 | |||
FORTEN COMPANY Income Statement For Year Ended December 31, 2018 |
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Sales | $ | 582,500 | ||||
Cost of goods sold | 285,000 | |||||
Gross profit | 297,500 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 20,750 | ||||
Other expenses | 132,400 | 153,150 | ||||
Other gains (losses) | ||||||
Loss on sale of equipment | (5,125 | ) | ||||
Income before taxes | 139,225 | |||||
Income taxes expense | 24,250 | |||||
Net income | $ | 114,975 | ||||
Problem 12-4AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4
Additional Information on Year 2018 Transactions
Required:
Prepare a complete statement of cash flows using a spreadsheet;
report its operating activities using the indirect method.
(Enter all amounts as positive values.)
Answer-1)-
FORTEN COMPANY | ||
STATEMENT OF CASH FLOWS (USING INDIRECT METHOD) | ||
FOR THE YEAR ENDED 31 DECEMBER,2018 | ||
Particulars | Amount | |
$ | ||
Cash flow from operating activities | ||
Net Income | 114975 | |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Adjustment for non cash effects | ||
Depreciation | 20750 | |
Loss on sale of equipment | 5125 | |
Change in operating assets & liabilities | ||
Increase in accounts receivable | -15185 | |
Increase in inventory | -23856 | |
Decrease in prepaid expenses | 625 | |
Decrease in accounts payable | -61534 | |
Net cash flow from operating activities (a) | 40900 | |
Cash Flow from Investing activities | ||
New equipment purchased | -30000 | |
Equipment sold | 11625 | |
Net cash Flow from Investing activities (b) | -18375 | |
Cash Flow from Financing activities | ||
Cash dividends paid | -50100 | |
Common stock issued | 50000 | |
Short term note issued | 4000 | |
Long term notes paid | -50125 | |
Net cash Flow from Financing activities (c) | -46225 | |
Net Change in cash c=a+b+c | -23700 | |
Beginning cash balance | 73500 | |
Closing cash balance | 49800 | |
Schedule of non cash investing & financing activities | ||
Issuance of long term note for equipment | ($96375-$30000) | 66375 |
Forten Company, a merchandiser, recently completed its calendar-year 2018 operations. For the year, (1) all sales...
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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 Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s income statement and balance sheets follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2017...
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 Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s income statement and balance sheets follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2017...
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 Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s income statement and balance sheets follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2017...
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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 Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's income statement and balance sheets follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2017...
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 Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's income statement and balance sheets follow. FORTEN COMPANY Comparative Balance Sheets December 31, 2017...
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 $ 49,800...