Question

Use the following information for the Problems 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 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 and 2016 2017 2016 $ 61,900 $ 81,500 77,850 58,625 287,656 259,800 1,290 2,055 428,696 401,980 149,500 116,000 (40,625) (50,000) $ 537,571 $ 467,980 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 $ 61,141 $ 12,400 73,541 61,000 134,541 126,675 7,600 134,275 56,750 191,025 178,750 158, 250 45,500 0 178, 780 118,705 $ 537,571 $ 467,980

Answer 1

Statement of Carh Flouws for year Ended December 31, 2017 Cash flods taorm opecating activities Net Income $111,75 Adjutments te reLoncile net in come to net cash providled by operationss f0,350 $19,235) $lda,856) Sepreiation expense Accounts Receivable increase Inventory increase Parpaid expense decrease Accounts Payable dlecrease en dlisposal eguipment 765 f(65,534) $13, 125 Loas $41,800 Net cash prouided ay operating activite Cash tlows faem investing activixies Cash paid for eauipment Cath Aeceived taom sale of equpment19, 62s (46,000) Net cash used in in vesting activities (26,375) Cash flows fAm financing activities: Cash borrouoed en thont-team nete $4,800 $L54,125) 66,000 (S1,200) Cash paid on Long dehm note Cash receiued rom isuing stock Cash paidl tor oliuidend Net cash uscd in finaning activities Net increaseldecrcase) in carh cash balance at beginning year end of jear (35025) fl19,600) 81, 500 | + 61, १०० Cash balaunce act

Cal culation: Snerease n acuounts receivable S7985t-05a'tt $ 19,225 Prerease in in ventoy 287,656 427, 856 259,800 Decrease in Prepaid expenses 2,055 F765 1,290 Deerease n acuounts Peuable 126,675-$ 6 1,141 $65,534 Cash received 1nom suing stock 3,300 Mharex 20 66,000