Problem 12-2AA Indirect: Cash flows spreadsheet LO

Problem 12-2AA Indirect: Cash flows spreadsheet LO

Question
	Problem 12-2AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4
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
20132012
 Assets
 Cash$49,200 $73,000 
 Accounts receivable65,890 57,000 
 Merchandise inventory276,500 253,000 
 Prepaid expenses1,250 1,900 
 Equipment158,000 106,500 
 Accum. depreciation—Equipment(36,500) (46,000) 
 Total assets$514,340 $445,400 
 Liabilities and Equity
 Accounts payable$63,590 $111,000 
 Short-term notes payable10,000 6,000 
 Long-term notes payable62,500 48,250 
 Common stock, $5 par value162,250 150,750 
 Paid-in capital in excess of par, common stock34,500 0 
 Retained earnings181,500 129,400 
 Total liabilities and equity$514,340 $445,400 

FORTEN COMPANY Income Statement For Year Ended December 31, 2013
 Sales$582,500 
 Cost of goods sold289,000 
 Gross profit293,500 
 Operating expenses
 Depreciation expense$20,000 
 Other expenses134,000 154,000 
 Other gains (losses)
 Loss on sale of equipment(5,500)
 Income before taxes134,000 
 Income taxes expense25,500 
 Net income$108,500 

 






Additional Information on Year 2013 Transactions





















a.Net income was $108,500.
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 $46,500, with accumulated depreciation of $29,500, for $11,500 cash. This yielded a loss of $5,500.

h.
Purchased equipment costing $98,000 by paying $30,000 cash and(i.)by signing a long-term note payable for the balance.















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j.Borrowed $4,000 cash by signing a short-term note payable.
k.Paid $53,750 cash to reduce the long-term notes payable.
l.Issued 2,300 shares of common stock for $20 cash per share.
m.Declared and paid cash dividends of $56,400.

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.)