Forten company,a merchandiser, recently completed its calendar-year 2017 operati

ID: 2334971 • Letter: F

Question

Forten company,a merchandiser, recently completed its calendar-year 2017 operations. For the year, (1) all sales are credited sales, (2) all credit to accounts receivable reflects cash receipts from customers, (3) all purchases off inventory are on Credit, (4) all debit to accounts payable reflects cash payments for inventory, (5) other expenses are in advanced and are initially debit to the to prepaid expenses. the company's income statement and balance sheets follow.

conpony s ncorme statement and balance shee FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets 52,900 $ cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets 75,500 52,625 253,800 1,995 383,920 110,000 68,810 278,656 1,270 401,636 155,500 (37,625) 519,511 Liabilities and Equity Accounts payable short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity (47,000) 446,920 117,675 6,400 124,075 50,750 174,825 152,250 55,141$ 10,600 65,741 64,000 129,741 166, 750 39,500 183,520 119,845 s 519,511 $ 446,920 FORTEN COMPA Income Statement

Explanation / Answer

Cash Flow from Operating Activities :-

Cash Received from Customer

(592500{sales} – 16185{increase in A/c receivable}

576315

(-) Cash Paid to Supplier

(287000{COGS} + 62534{decrease in a/c payable} + 24856{increase in inventory}

374390

(-) Other Exp Paid

(134400 – 725 (decrease in prepaid exp)

133675

(+) Increase Short term Notes Payable

4200

(-) Income Tax Paid

27050

Cash Flow from Operating Activities (A)

45400

Cash Flow from Investing Activities :-

Sold Equipment

13625

(-) Purchase Equipment

34000

Cash Flow from Investing Activities (B)

(20375)

Cash Flow from Financing Activities :-

(-) Paid Long term Notes

51125

(-) Paid Dividend

50500

(+) Issue common stock

54000

Cash Flow from Financing Activities (C)

(47625)

Net Increase (Decrease) in Cash (A+B+C)

(22600)

(+) Beginning Cash Balance

75500

Ending Cash Balance

52900