Question

Forten Company, a merchandiser, recently completed itscalendar-year 2015 operations. For the year, (1) all sales arecredit sales, (2) all credits to Accounts Receivable reflect cashreceipts from customers, (3) all purchases of inventory are oncredit, (4) all debits to Accounts Payable reflect cash paymentsfor inventory, and (5) Other Expenses are paid in advance and areinitially debited to Prepaid Expenses. The company’s incomestatement and balance sheets follow.

FORTEN COMPANY Comparative Balance Sheets December 31, 2015 and 2014
	2015			2014
Assets
Cash	$	50,404		$	68,000
Accounts receivable		73,525			57,125
Inventory		265,906			238,800
Prepaid expenses		1,440			1,900
Total current assets		391,275			365,825
Equipment		154,300			112,000
Accum. depreciation—Equipment		(45,400)			(52,000)
Total assets	$	500,175		$	425,825
Liabilities and Equity
Accounts payable	$	58,875		$	110,000
Short-term notes payable		8,400			5,200
Total current liabilities		67,275			115,200
Long-term notes payable		33,575			39,000
Total liabilities		100,850			154,200
Equity
Common stock, $5 par value		161,500			148,000
Paid-in capital in excess of par, common stock		40,500			0
Retained earnings		197,325			123,625
Total liabilities and equity	$	500,175		$	425,825

FORTEN COMPANY Income Statement For Year Ended December 31, 2015
Sales				$	615,000
Costof goods sold					298,000
Gross profit					317,000
Operating expenses
Depreciation expense	$	19,200
Other expenses		141,000			160,200
Other gains (losses)
Loss on sale ofequipment					(4,300)
Income before taxes					152,500
Income taxes expense					29,000
Netincome				$	123,500

Additional Information on Year 2015Transactions
a.	The loss on the cash sale of equipment was $4,300 (details inb).
b.	Sold equipment costing $44,800, with accumulated depreciation of$25,800, for $14,700 cash.
c.	Purchased equipment costing $87,100 by paying $50,000 cash andsigning a long-term note payable for the balance.
d.	Borrowed $3,200 cash by signing a short-term note payable.
e.	Paid $42,525 cash to reduce the long-term notes payable.
f.	Issued 2,700 shares of common stock for $20 cash per share.
g.	Declared andpaid cash dividends of $49,800.

Required:
1.	Prepare a complete statement of cash flows; report its operatingactivities using the indirect method. (Amounts to bededucted should be indicated with a minus sign.)

FORTEN COMPANY
Statement of Cash Flows
For Year Ended December 31,2015
Cash flows from operatingactivities
Net Income
Adjustments to reconcile net income tonet cash provided by operations:
Cash flows from investingactivities
Cash flows from financingactivities:
Net increase (decrease) incash
Cash balance at beginning ofyear
Cash balance at end ofyear