Question

Help 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 December 31, 2017 and 2816 2016 Assets Cash Accounts receivable Inventory Prepaid expenses $69,400 $86,500 63,625 264,800 2,155 85,400 295,156 451,296 144,500 43,125) (52,500) Total assets Liabilities and Equity Short-tern notes payable 121,000 552,671 485,580 66,141 134, 175 80,041 58,500 138,541 8.600 142,775 61,750 204,525 Total current liabilities Equity 163,250 in e 5e,500 174,880

Answer 1

Cash flow indirect method
Cash flow from operating activities
Net income		109775
Adjustments to reconcile the net income
Depreciation and amortization expense	33750
Loss on sale of equipment	18125
Changes in current asset and liabilities
Increase in accounts receivable	-21775
Increase in inventory	-30356
decrease in prepaid expense	815
decrease in accounts payable	-68034
Increase short term Notes payable	5300
		-62175
Cash flow from operating activities		47600
Cash flow from Investing activities
Equipment sold	24625
Equipment purchased	-56000
Cash flow from Investing activities		-31375

	Cash flow from Financing activities
	Paid in value in excess of par	57000
	Common stock	19000
	Dividend	-52700
	Long term notes payable	-56625
	Cash flow from Financing activities		-33325
	Net Cash and cash equivalent		-17100
Add	Beginning cash and cash equivalent		86500
	Ending cash and cash equivalent		69400