Reference no: EM132316406
Question :
Comparative Balance Sheets December 31
| |
Current Year
|
Prior Year
|
|
Assets
|
|
|
|
Cash
|
$69,400
|
$86,500
|
|
Accounts receivable
|
85,400
|
63,625
|
|
Inventory
|
295,156
|
264,800
|
|
Prepaid expenses
|
1,340
|
2,155
|
|
Total current assets
|
451,296
|
417,080
|
|
Equipment
|
144,500
|
121,000
|
|
Accum. depreciation-Equipment
|
(43,125)
|
(52,500)
|
|
Total assets
|
$ 552,671
|
$485,580
|
|
Liabilities and Equity
|
|
|
|
Accounts payable
|
$66,141
|
$134,175
|
|
Short-term notes payable
|
13,900
|
8,600
|
|
Total current liabilities
|
80,041
|
142,775
|
|
Long-term notes payable
|
58,500
|
61,750
|
|
Total liabilities
|
138,541
|
204,525
|
|
Equity
|
|
|
|
Common stock, $5 par value
|
182,250
|
163,250
|
|
Paid-in capital in excess of par common stock
|
57,000
|
0
|
|
Retained earnings
|
174,880
|
117,805
|
|
Total liabilities and equity
|
$552,671
|
$485,580
|
FORTEN COMPANY : Income Statement For Current Year Ended December 31
|
Sales
|
|
$647,500
|
|
Cost of goods sold
|
|
298,000
|
|
Gross profit
|
|
349,500
|
|
Operating expenses
|
|
|
|
Depreciation expense
|
$33,750
|
|
|
Other expenses
|
145,400
|
179,150
|
|
Other gains (losses)
|
|
|
|
Loss on sale of equipment
|
|
(18,125)
|
|
Income before taxes
|
|
152,225
|
|
Income taxes expense
|
|
42,450
|
|
Net income
|
|
$109,775
|
Additional Information on Current Year Transactions
The loss on the cash sale of equipment was $18,125 (details in b).
Sold equipment costing $85,875, with accumulated depreciation of $43,125, for $24,625 cash.
Purchased equipment costing $109,375 by paying $56,000 cash and signing a long-term note payable for the balance.
Borrowed $5,300 cash by signing a short-term note payable.
Paid $56,625 cash to reduce the long-term notes payable.
Issued 3,800 shares of common stock for $20 cash per share.
Declared and paid cash dividends of $52,700.
Required
Make a complete statement of cash flows using the indirect method for the current year.