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	$	70,944		$	72,000
Accountsreceivable		79,125			61,125
Inventory		259,906			230,800
Prepaidexpenses		1,600			2,100
Total currentassets		411,575			366,025
Equipment		162,500			120,000
Accum.depreciation—Equipment		(53,800)			(60,000)
Total assets	$	520,275		$	426,025
Liabilitiesand Equity
Accountspayable	$	58,075		$	111,200
Short-term notespayable		10,000			6,000
Total currentliabilities		68,075			117,200
Long-term notespayable		24,175			43,000
Totalliabilities		92,250			160,200
Equity
Common stock, $5 par value		167,500			150,000
Paid-in capital in excess of par, common stock		52,500			0
Retained earnings		208,025			115,825
Total liabilitiesand equity	$	520,275		$	426,025

FORTEN COMPANY Income Statement For Year Ended December 31, 2015
Sales				$	635,000
Cost of goodssold					306,000
Gross profit					329,000
Operatingexpenses
Depreciation expense	$	20,000
Other expenses		128,300			148,300
Other gains(losses)
Loss on sale ofequipment					(4,500)
Income beforetaxes					176,200
Income taxesexpense					31,000
Net income				$	145,200

AdditionalInformation on Year 2015 Transactions
a.	The loss on the cash sale of equipment was $4,500 (details inb).
b.	Sold equipment costing $45,800, with accumulated depreciation of$26,200, for $15,100 cash.
c.	Purchased equipment costing $88,300 by paying $63,000 cash andsigning a long-term note payable for the balance.
d.	Borrowed $4,000 cash by signing a short-term note payable.
e.	Paid $44,125 cash to reduce the long-term notes payable.
f.	Issued 3,500 shares of common stock for $20 cash per share.
g.	Declared and paid cash dividendsof $53,000.

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.)