Question

FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets $ 64,900 $ 83,500 60,625 261,800 2,095 408,020 118,000 80,870 290,656 1,310 437,736 147,500 41,625 51,000 $ 543,611 $ 475,020 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 1liabilities and equity $ 63,141 $ 129,675 8,000 137,675 58,750 196,425 13,000 76,141 60,000 136,141 182,750 47,500 177,220 160,250 118,345 $ 543,611 $ 475,020 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $632,500 295,000 337,500 Depreciation expense 30,750 142,400 173,150 Other expenses Other gains (losses) (15, 125) 149,225 38,250 $ 110,975 Loss on sale of equipment Income before taxes Income taxes expense Net income

Required: 1. Prepare a complete statement of cash flows using a spreadsheet.

2.Prepare a complete statement of cash flows; report its operating activities according to the direct method.

Please show all the calculations work! Thank you for your help!

Answer 1

	Cash flow direct method
	Sales	632500
	Adjustments to a cash basis
	Accounts receivable as per 2016	60625
	Accounts receivable as per 2017	-80870	612255
Less	Cost of goods sold	295000
	Adjustments to a cash basis
	Inventory as per 2016	-261800
	Inventory as per 2017	290656
	Accounts payable as per 2016	129675
	Accounts payable as per 2017	-63141	390390
	Operating expense less depreciation and amortization	142400
	Adjustments to a cash basis
	Prepaid expense 2016	-2095
	Prepaid expense 2017	1310
	short term payable 2016	8000
	Short term payable 2017	-13000	136615
	Income tax expense		38250
	Cash flow from operating activities		47000

	Cash flow statement
	Cash flow from operating activities		47000
	Cash flow from Investing activities
	Long term investment sold
	Equipment purchased	-50000
	Land purchased
	Equipment sold	21625	-28375
	Cash flow from Financing activities
	Issue of common stock	22500
	Paid in capital inexcess	47500
	Dividend paid	-52100
	Long term loan payable	-55125
			-37225
	Net Cash and cash equivalent		-18600
Add	Beginning cash and cash equivalent		83500
	Ending cash and cash equivalent		64900