forten company a merchandiser recently completed its calenda

5.00 points Problem 12-3A Indirect: Statement of cash flows LO A1, P1, P2, P3 Forten Company, a merchandiser, recently completed its calendar-year 2015 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, 2015 and 2014 2015 2014 Assets Cash S 66,249 67,500 56,625 266,656 239,800 1,875 72,825 Prepaid expenses 1,420 Total current assets Equipment 407,150 153,275 (44,350) 365,800 111,000 (51,000) Accum. de Total assets Liabilities and Equity Equipment $ 516,075 $425,800 Accounts payable 58,975 109,850 Short-term notes payable 8,200 5,100 Total current liabilities 67.175 114,950 38,125 105,300 160,750 38,500 153,450 147,750 124,600 Long-term notes payable Total liablities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings 39,000 11,025 24 $ 516,076 425,800 Total liabilitios and equity 2 3 4 6

Solution

FORTEN COMPANY STATEMENT OF CASH FLOW Cash Flow from Operating Actvities Net Income 135825 Adjustment to reconcile net income to net cash provided by operation Add Loss on sales of Equipment 4275 Add Depreciation 19100 Increase in Account Receivable -16200 Increase in Inventory -26856 decrease in Prepaid Expense 455 decrease in Account Payable -50875 Increase in Account Short Note Payable 3100 -67001 Cash Flow from Operating Actvities 68824 Cash Flow from Investment actvities Purchase of Equipment -45000 Sales of Equipment 14650 Cash Flow from Investment actvities -30350 Cash Flow From Financing Actvities Dividend Paid -49400 Common Stock Issued 52000 Long term Note paid -42325 Cash Flow From Financing Actvities -39725 Net Increase (Decrease) in Cash -1251 Cash balance at beginning of Year 67500 Cash balance at End of Year 66249