Check my work dis Forten Company, a merchandiser, recently completed its calenda

Question

Check my work dis Forten Company, a merchandiser, recently completed its calendar-year 2017 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 r 31, 2017 and 2016 2017 2016 Assets Cash 79,900 93,500 70,625 271,800 2,295 438,220 137,500 128,000 46.625) 56,000) $573,811 $510,220 95,970 305,656 Inventory Prepaid expenses Total current assets 482,936 Accum. depreciation-Equipment Liabilities and Equity Accounts payable Short-term notes payable Total current 1iabilities Long-term notes payable Total 1iabilities Equity s 73,141 $144,675 10.000 16,000 68,750 223,425 S5,000 K Prev 2 of 4l Next > 9

Explanation / Answer

FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Net Income $106,975 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense 40,750 Accounts receivable increase -25,345 Inventory increase -33,856 Prepaid expense decrease 885 Accounts payable decrease -71,534 Loss on disposal of equipment 25,125 Net cash provided by operating activities $43,000 Cash flows from investing activities Cash paid for equipment -70,000 Cash received from sale of equipment 31,625 Net cash used in investing activities -38375 Cash flows from financing activities: Cash borrowed on short-term note 6,000 Cash paid on long-term note -60,125 Cash received from issuing stock 90,000 Cash paid for dividends -54,100 Net cash used in financing activities -18225 Net increase (decrease) in cash -13600 Cash balance at beginning of year 93,500 Cash balance at end of year 79900

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