Forten Company 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
Assets20152014
Cash$66,249$67,500
Accounts receivable72,82556,625
Inventory266,656239,800
Prepaid expenses1,4201,875
Total current assets407,150365,800
Equipment153,275111,000
Accum. depreciation Equipment(44,350)(51,000)
Total assets516,075425,800
Liabilities and Equity
Accounts payable$58,975$109,850
Short-term notes payable8,2005,100
Total current liabilities61,175114,950
Long-term notes payable38,12538,500
Total liabilities105,300153,450
Equity
Common stock $5 par value160,750147,750
Paid-in capital in excess of par, common stock39,0000
Retained earnings211,025124,600
Total Equity$410,775$272,350
Total liabilities and equity$516,075$425,800
FORTEN COMPANY Income Statement For Year Ended December 31, 2015
Sales $612,500
Cost of goods sold 297,000
Gross profit 315,500
Operating expenses
Depreciation expense$19,100
Other expenses127,550146,650
Other gains (losses)
Loss on sale of equipment (4,275)
Income before taxes 164,575
Income taxes expense 28,750
Net income $135,825
Additional information on the Year 2015 transactions
a. The loss on the cash sale of equipment was $4,275 (details in b)
b. Sold equipment costing $44,675, with accumulated depreciation of $25,750, for $14,650 cash.
c. Purchased equipment costing $86,950 by paying $45,000 cash and signing a long-term note payable for the balance.
d. Borrowed $3,100 cash by signing a short-term note payable.
e. Paid $42,325 cash to reduce the long-term notes payable.
f. Issued 2,600 shares of common stock for $20 cash per share.
g. Declared and paid cash dividends of $49,400.
Required
1. Prepare a complete statement of cash flows, report its operating activities using the indirect method.