Forten Company, a merchandiser, recently completed its calendar-year 2016 operat

Question

Forten Company, a merchandiser, recently completed its calendar-year 2016 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, 2016 and 2015 20162015 $ 95,555 74,000 53,000 252,500 1,800 381,300 106,500 46,000 Accounts receivable Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets 65,840 276,000 1,250 438,645 154,605 $ 556,750 441,800 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 $ 97,000 $114,000 10.000000 107.000 20,000 48,250 168,250 61,150 168,150 163,000 36,000 151,000 189,600122,550 $556,750 $441,800

Explanation / Answer

Notes:

FORTEN COMPANY Statement of Cash Flows For the year ended December 31 2016 Cash from operating activities Cash from sales 571160 Cash paid for purchases -322500 Cash paid for expenses -133050 Income Tax payment -24250 91360 Cash from investing activities Sale of Equipment 14045 Purchase of equipment -30000 -15955 Cash from financing activities Acceptancce of short term notes payable 4000 Payment for long term notes payable -54250 Issue of Common Stock 48000 Dividend payment -51600 -53850 Net Increase / decrease in Cash 21555 Cash balance at beginning of year 74000 Cash balance at end of year 95555

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