please help thank you so much! Additional Information on Year 2013 Transactions

Question

please help thank you so much!

Additional Information on Year 2013 Transactions Net income was $114,975. Accounts receivable increased. Merchandise inventory increased. Prepaid expenses decreased. Accounts payable decreased. Depreciation expense was $20,750. Sold equipment costing $46,875. with accumulated depreciation of $30,125, for $11,625 cash. This yielded a loss of $5,125. Purchased equipment costing $96,375 by paying $30,000 cash and by signing a long-term note payable for the balance. Borrowed $4,000 cash by signing a short-term note payable, Paid $50,125 cash to reduce the long-term notes payable. Issued 2,500 shares of common stock for $20 cash per share, Declared and paid cash dividends of $50,100. 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.)

Explanation / Answer

Forten Company
Statement of Cash Flows
For the Year Ended December 31, 2013

Cash flows from operating activities:
Net income 114,975
Items to reconcile net income to cash flows from operating activities
Depreciation expense 20,750
Loss on sale of equipment 5,125
Increase in accounts receivable (15,185)
Increase in merchandise inventory (23,856)
Decrease in prepaid expenses 625
Decrease in accounts payable (61,534)
Increase in short-term notes payable 4,000
Net cash flows from operating activities 44,900

Cash flows for investing activities:
Cash received from sale of equipment 11,625
Cash used to purchase equipment (30,000)
Net cash flows for investing activities (18,375)

Cash flows for financing activities:
Cash received from issuance of common stock 50,000
Cash used to pay long-term note payable (50,125)
Cash used to pay dividends (50,100)
Net cash flows for financing activities (50,225)

Net decrease in cash (23,700)
Cash balance on January 1 73,500

Cash balance on December 31 49,800

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