Forten Company, a merchandiser, recently completed its calendar-year 2013 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 balance sheets and income statement follow.
| FORTEN COMPANY Comparative Balance Sheets December 31, 2013 and 2012 | |||||
| 2013 | 2012 | ||||
| Assets | |||||
| Cash | $ | 49,200 | $ | 73,000 | |
| Accounts receivable | 65,890 | 57,000 | |||
| Merchandise inventory | 276,500 | 253,000 | |||
| Prepaid expenses | 1,250 | 1,900 | |||
| Equipment | 158,000 | 106,500 | |||
| Accum. depreciation—Equipment | (36,500) | (46,000) | |||
|
|
|
|
|
||
| Total assets | $ | 514,340 | $ | 445,400 | |
|
|
|
|
|
||
| Liabilities and Equity | |||||
| Accounts payable | $ | 63,590 | $ | 111,000 | |
| Short-term notes payable | 10,000 | 6,000 | |||
| Long-term notes payable | 62,500 | 48,250 | |||
| Common stock, $5 par value | 162,250 | 150,750 | |||
| Paid-in capital in excess of par, common stock | 34,500 | 0 | |||
| Retained earnings | 181,500 | 129,400 | |||
|
|
|
|
|
||
| Total liabilities and equity | $ | 514,340 | $ | 445,400 | |
|
|
|
|
|
||
|
|
WRITE THIS ESSAY FOR ME
Tell us about your assignment and we will find the best writer for your paper.
Get Help Now!| FORTEN COMPANY Income Statement For Year Ended December 31, 2013 | |||||
| Sales | $ | 582,500 | |||
| Cost of goods sold | 289,000 | ||||
|
|
|
||||
| Gross profit | 293,500 | ||||
| Operating expenses | |||||
| Depreciation expense | $ | 20,000 | |||
| Other expenses | 134,000 | 154,000 | |||
|
|
|
||||
| Other gains (losses) | |||||
| Loss on sale of equipment | (5,500) | ||||
|
|
|
||||
| Income before taxes | 134,000 | ||||
| Income taxes expense | 25,500 | ||||
|
|
|
||||
| Net income | $ | 108,500 | |||
|
|
|
||||
|
|
| Additional Information on Year 2013 Transactions |
| a. | Net income was $108,500. |
| b. | Accounts receivable increased. |
| c. | Merchandise inventory increased. |
| d. | Prepaid expenses decreased. |
| e. | Accounts payable decreased. |
| f. | Depreciation expense was $20,000. |
| g. | Sold equipment costing $46,500, with accumulated depreciation of $29,500, for $11,500 cash. This yielded a loss of $5,500. |
| h. | Purchased equipment costing $98,000 by paying $30,000 cash and(i.)by signing a long-term note payable for the balance. |
| j. | Borrowed $4,000 cash by signing a short-term note payable. |
| k. | Paid $53,750 cash to reduce the long-term notes payable. |
| l. | Issued 2,300 shares of common stock for $20 cash per share. |
| m. | Declared and paid cash dividends of $56,400. |
| 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. |
Introducing our Online Essay Writing Services Agency, where you can confidently place orders for a wide range of academic assignments. Our reputable homework writing company specializes in crafting essays, term papers, research papers, capstone projects, movie reviews, presentations, annotated bibliographies, reaction papers, research proposals, discussions, and various other assignments. Rest assured, our content is guaranteed to be 100% original, as every piece is meticulously written from scratch. Say goodbye to concerns about plagiarism and trust us to deliver authentic and high-quality work.
WRITE MY ESSAY NOW
