Reference no: EM13834737
Forten Company, a merchandiser, recently completed its calendar-year 2013 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 balance sheets and income statement follow.
|
FORTEN COMPANY
Comparative Balance Sheets
December 31, 2013 and 2012
|
|
|
2013
|
|
2012
|
|
Assets
|
|
|
|
|
|
|
Cash
|
$
|
49,600
|
|
$
|
73,500
|
|
Accounts receivable
|
|
65,890
|
|
|
54,000
|
|
Merchandise inventory
|
|
277,000
|
|
|
252,000
|
|
Prepaid expenses
|
|
1,250
|
|
|
1,700
|
|
Equipment
|
|
157,500
|
|
|
107,000
|
|
Accum. depreciation-Equipment
|
|
(36,375)
|
|
|
(46,000)
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
514,865
|
|
$
|
442,200
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
Accounts payable
|
$
|
51,790
|
|
$
|
113,000
|
|
Short-term notes payable
|
|
9,000
|
|
|
6,000
|
|
Long-term notes payable
|
|
62,500
|
|
|
48,500
|
|
Common stock, $5 par value
|
|
162,500
|
|
|
150,750
|
|
Paid-in capital in excess of par, common stock
|
|
35,250
|
|
|
0
|
|
Retained earnings
|
|
193,825
|
|
|
123,950
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
$
|
514,865
|
|
$
|
442,200
|
|
|
|
|
|
|
|
|
FORTEN COMPANY
Income Statement
For Year Ended December 31, 2013
|
|
Sales
|
|
|
$
|
584,500
|
|
Cost of goods sold
|
|
|
|
281,000
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
303,500
|
|
Operating expenses
|
|
|
|
|
|
Depreciation expense
|
$
|
20,000
|
|
|
|
Other expenses
|
|
132,800
|
|
152,800
|
|
|
|
|
|
|
|
Other gains (losses)
|
|
|
|
|
|
Loss on sale of equipment
|
|
|
|
(5,625)
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
|
145,075
|
|
Income taxes expense
|
|
|
|
23,000
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
122,075
|
Additional Information on Year 2013 Transactions
a. Net income was $122,075.
b. Accounts receivable increased.
c. Merchandise inventory increased.
d. Prepaid expenses decreased.
e. Accounts payable decreased.
f. Depreciation expense was $20,000.
g. Sold equipment costing $46,875, with accumulated depreciation of $29,625, for $11,625 cash. This yielded a loss of $5,625.
h. Purchased equipment costing $97,375 by paying $35,000 cash and (i.) by signing a long-term note payable for the balance.
j. Borrowed $3,000 cash by signing a short-term note payable.
k. Paid $48,375 cash to reduce the long-term notes payable.
l. Issued 2,350 shares of common stock for $20 cash per share.
m. Declared and paid cash dividends of $52,200.
Required:
Prepare a complete statement of cash flows using a spreadsheet; report its operating activities using the indirect method. (Enter all amounts as positive values.)
|
FORTEN COMPANY
|
|
Spreadsheet for Statement of Cash Flows
|
|
For Year Ended December 31, 2013
|
|
|
Analysis of Changes
|
|
|
December 31, 2012
|
Debit
|
Credit
|
December 31, 2013
|
|
Balance sheet-debit balance accounts
|
|
|
|
|
|
Cash
|
$73,500
|
|
|
$49,600
|
|
Accounts receivable
|
54,000
|
11,890
|
|
65,890
|
|
Merchandise inventory
|
252,000
|
25,000
|
|
277,000
|
|
Prepaid expenses
|
1,700
|
|
450
|
1,250
|
|
Equipment
|
107,000
|
|
|
|
|
|
$488,200
|
|
|
$393,740
|
|
Balance sheet-credit balance accounts
|
|
|
|
|
|
Accumulated depreciation-Equipment
|
$46,000
|
|
|
|
|
Accounts payable
|
113,000
|
61,210
|
|
51,790
|
|
Short-term notes payable
|
6,000
|
|
3,000
|
9,000
|
|
Long-term notes payable
|
48,500
|
|
|
|
|
Common stock, $5 par value
|
150,750
|
|
11,750
|
162,500
|
|
Paid-in capital in excess of par value, common stock
|
0
|
|
35,250
|
35,250
|
|
Retained earnings
|
123,950
|
|
|
|
|
$488,200
|
|
|
$258,540
|
|
Calculate the maximum height the ball will reach
: calculate the maximum height the ball will reach
|
|
What are the sequence number source port number
: In the second segment sent from A to B, what are the sequence number, source port number and destination port number? If the first segment arrives before the second segment, in the acknowledgment of the first arriving segment, what is the acknowledgm..
|
|
How the use of ifrs is enforced within your chosen country
: Discuss whether and how the use of IFRS is enforced within your chosen country. Evaluate whether the firm's accounts are comparable with their key global competitors.
|
|
Levels of contingent liabilities
: 1. Identify the three levels of contingent liabilities and the respective accounting treatments.
|
|
Problem regarding the forten company
: Forten Company, a merchandiser, recently completed its calendar-year 2013 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 ..
|
|
Perform a financial analysis of wmt vs tgt
: Perform a FINANCIAL ANALYSIS of WMT vs. TGT: Create side-by-side LINE CHARTS with CAGRs for WMT vs. TGT for fiscal years 2007-2014 in SALES, STOCK PRICE, NET PROFITS.
|
|
Program that allows user to search internet account number
: Read, validate and store account number and internet usage for N customers - Calculate, store and display the cost for all customers and Calculate, store and display the cost for all customers
|
|
What are all possible values of the ack field
: What are the possible sets of sequence numbers inside the sender's window at time t? Justify your answer.What are all possible values of the ACK field in all possible messages currently propagating back to the sender at time t? Justify your answer.
|
|
Which of the following risk factors can you control
: Which of the following risk factors can you control
|