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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 companys balance sheets and income statement follow.

FORTEN COMPANY Comparative Balance Sheets December 31, 2013 and 2012
	2013			2012
Assets
Cash	$	54,534		$	71,000
Accounts receivable		77,725			60,125
Merchandise inventory		261,406			232,800
Prepaid expenses		1,560			2,050
Equipment		160,450			118,000
Accum. depreciationEquipment		(51,700)			(58,000)
Total assets	$	503,975		$	425,975
Liabilities and Equity
Accounts payable	$	58,275		$	110,900
Short-term notes payable		9,600			5,800
Long-term notes payable		25,275			42,000
Common stock, $5 par value		166,000			149,500
Paid-in capital in excess of par, common stock		49,500			0
Retained earnings		195,325			117,775
Total liabilities and equity	$	503,975		$	425,975

FORTEN COMPANY Income Statement For Year Ended December 31, 2013
Sales				$	630,000
Cost of goods sold					304,000
Gross profit					326,000
Operating expenses
Depreciation expense	$	19,800
Other expenses		141,500			161,300
Other gains (losses)
Loss on sale of equipment					(4,450)
Income before taxes					160,250
Income taxes expense					30,500
Net income				$	129,750

Additional Information on Year 2013 Transactions
a.	The loss on the cash sale of equipment was $4,450 (details in b).
b.	Sold equipment costing $45,550, with accumulated depreciation of $26,100, for $15,000 cash.
c.	Purchased equipment costing $88,000 by paying $61,000 cash and signing a long-term note payable for the balance.
d.	Borrowed $3,800 cash by signing a short-term note payable.
e.	Paid $43,725 cash to reduce the long-term notes payable.
f.	Issued 3,300 shares of common stock for $20 cash per share.
g.	Declared and paid cash dividends of $52,200.

Required:
1.	Prepare a complete statement of cash flows; report its operating activities using the indirect method.

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