Question

Use the following information for the Problems below. Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year, () all sales are credit sales, (2) all cred its 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 Assets 75,400 91,440 301,156 Cash 90,500 67,625 268,800 2,235 Accounts receivable Inventory Prepaid expenses 1,380 469,376 140,500 (45,125) Total current assets Equipment Accum. depreciation-Equipment 429,160 125,000 (54,500) $499,660 Total assets 564,751 Liabilities and Equity Accounts payable Short-term notes payable $ 140,175 70,141 15,100 9,400 Total current liabilities 85,241 56,500 149,575 65,750 215,325 Long-term notes payable Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings 141,741 196,750 54,500 171,760 167,250 117,085 $ 564,751 Total liabilities and equity $499,660

Answer 1

Forten Company
Cashflow Statement - Direct method
Cash flows from Operating Activities			Calculation
Cash collections from customers		643,685	Workings below
Cash payments
Cash paid to suppliers for Inventory	404,390
Cash paid for operating expenses	148,545
Cash paid for Income Taxes	48,050
Total cash payments		600,985
Net Cash Provided/(Used) by Operating Activities		42,700
Cash flows from Investing Activities
Receipt from sale of equipment	28,625
Payment to purchase equipment	(64,000)
Net Cash Provided/(Used) by Investing Activities		(35,375)
Cash flows from Financing Activities
Borrowed on short term	5,700
Payment on long term	(58,625)
Issued common stock for cash	84,000		=4,200*20
Payment of cash Dividends	(53,500)
Net Cash Provided/(Used) by Financing Activities		(22,425)
Net increase (decrease) in Cash		(15,100)
Cash balance at Beginning of Year		90,500
Cash balance at End of Year		75,400

Workings
Cashflow Statement - Direct method
Cash flows from from Operating Activities
Sales		667,500
Opening Accounts Receivable		67,625
Closing Accounts Receivable		(91,440)
Cash collections from customers			643,685
Cash payments
Cost of sales	302,000
Opening Accounts Payable	140,175
Closing Accounts Payable	(70,141)
Closing Inventory	301,156
Opening Inventory	(268,800)
Cash paid to Suppliers		404,390
Operating other expenses	149,400
Closing Prepaid expenses	1,380
Opening Prepaid expenses	(2,235)
Cash paid for operating expenses		148,545
Cash paid for Income tax		48,050
Total Cash Payments			600,985
Net Cash Provided/(Used) by Operating Activities			42,700