/newconnect.mheducation.com/flow/connect.html eet Preparation of the Statement o
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/newconnect.mheducation.com/flow/connect.html eet Preparation of the Statement of C. G Saved 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 Comparative Balance Sheets December 31, 2817 and 2816 2017 2816 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Totel liabilities and equity $ 58,900 $ 79,500 56,625 284,656 257,800 1,270l 2,815 395, 940 151,500114,000 49,000 74,830 419,656 (39,625 S 531,531 460,940 59,141 123,675 7,280 70,941 ,000 132,941 11,8887 200 130,875 54,750 185,625 / 174,750 43,580 156,250 180 349 119,065 531,531 $460,940Explanation / Answer
Spreadsheet for statement of cashflows Analysis of changes Dec 31,2016 Debit Credit Dec 31,2017 Balance sheet-Debit Cash 79500 20600 58900 Accounts receivable 56625 18205 74830 Inventory 257800 26856 284656 Prepaid expenses 2015 745 1270 Equipment 114000 37500 151500 509940 571156 Balance sheet-Credit Accumulated depreciation-Equipment 49000 9375 39625 Accounts payable 123675 64534 59141 Short-term notes payable 7200 4600 11800 Long-term notes payable 54750 7250 62000 Common stock,$5 par value 156250 18500 174750 Paid in capital in excess of par value-Common stock 0 43500 43500 Retained earnings 119065 61275 180340 509940 571156 Cashflow statement Cashflow from operating activities: Net income 112575 Adjustments: Depreciation expense 26750 Loss on sale of equipment 11125 Increase in accounts receivable (74830-56625) -18205 Increase in inventory (284656-257800) -26856 Decrease in prepaid expenses (2015-1270) 745 Decrease in accounts payable (123675-59141) -64534 Increase in short-term notes payable (11800-7200) 4600 -66375 Cash generated from operations (a) 46200 Cashflow from financing activities: Repayment of long-term notes -53125 Issue of common shares (3100*20) 62000 Cash dividend paid -51300 Cash used in financing activities (b) -42425 Cashflow from investing activities: Sale of equipment 17625 Purchase of equipment -42000 Cash used in investing activities © -24375 Increase in cash and cash equivalence -20600 Add:Beginning balance of cash 79500 Ending balance of cash 58900 Non-cash investing and financing activities: Purchase of equipment financed by long-term note payable 60375 (102375-42000)
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