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	$	49,800		$	74,000
Accounts receivable		65,900			59,000
Inventory		277,000			252,500
Prepaid expenses		1,500			1,700
Total current assets		394,200			387,200
Equipment		158,500			106,500
Accum. depreciation—Equipment		(36,375)			(46,000)
Total assets	$	516,325		$	447,700
Liabilities and Equity
Accounts payable	$	54,325		$	113,000
Short-term notes payable		9,000			8,000
Total current liabilities		63,325			121,000
Long-term notes payable		65,000			48,000
Total liabilities		128,325			169,000
Equity
Common stock, $5 par value		162,500			150,750
Paid-in capital in excess of par, common stock		35,250			0
Retained earnings		190,250			127,950
Total liabilities and equity	$	516,325		$	447,700

FORTEN COMPANY Income Statement For Year Ended December 31, 2015
Sales				$	582,500
Costof goods sold					287,000
Gross profit					295,500
Operating expenses
Depreciation expense	$	20,000
Other expenses		132,000			152,000
Other gains (losses)
Loss on sale ofequipment					(5,250)
Income before taxes					138,250
Income taxes expense					24,250
Netincome				$	114,000

Additional Information on Year 2015Transactions

a.	Net income was$114,000.
b.	Accountsreceivable increased.
c.	Inventoryincreased.
d.	Prepaid expensesdecreased.
e.	Accounts payabledecreased.
f.	Depreciationexpense was $20,000.
g.	Sold equipment costing $46,500, with accumulated depreciation of$29,625, for $11,625 cash. This yielded a loss of $5,250.
h.	Purchased equipment costing $98,500 by paying $25,000 cash and(i.) by signing a long-term note payable for thebalance.
j.	Borrowed $1,000cash by signing a short-term note payable.
k.	Paid $56,500cash to reduce the long-term notes payable.
l.	Issued 2,350shares of common stock for $20 cash per share.
m.	Declared andpaid cash dividends of $51,700.

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.)

FORTEN COMPANY
Spreadsheet for Statement ofCash Flows
For Year Ended December 31,2015
		Analysis of Changes
	December 31, 2014	Debit	Credit	December 31, 2015
Balance sheet—debit
Cash	$74,000			$49,800
Accounts receivable	59,000
Inventory	252,500
Prepaid expenses	1,700
Equipment	106,500
	$493,700
Balance sheet—credit
Accumulateddepreciation—Equipment	$46,000
Accounts payable	113,000
Short-term notes payable	8,000
Long-term notes payable	48,000
Common stock, $5 parvalue	150,750
Paid-in capital in excess ofpar value, common stock	0
Retained earnings	127,950
	$493,700
Statement of cash flows
Operating activities
Investing activities
Financing activities
Non cash investing andfinancing activities
Purchase of equipment financedby long-term note payable