Question

Use the following information for the Problems below.

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Golden Corp.'s current year income statement, comparative balance sheets, and additional information follow. 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, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes.

GOLDEN CORPORATION Comparative Balance Sheets December 31
	Current Year						Prior Year
Assets
Cash		$	180,000					$	124,600
Accounts receivable			107,000						87,000
Inventory			625,000						542,000
Total current assets			912,000						753,600
Equipment			378,100						315,000
Accum. depreciation—Equipment			(166,000	)					(112,000	)
Total assets		$	1,124,100					$	956,600
Liabilities and Equity
Accounts payable		$	119,000					$	87,000
Income taxes payable			44,000						33,100
Total current liabilities			163,000						120,100
Equity
Common stock, $2 par value			611,200						584,000
Paid-in capital in excess of par value, common stock			224,800						184,000
Retained earnings			125,100						68,500
Total liabilities and equity		$	1,124,100					$	956,600

  

GOLDEN CORPORATION Income Statement For Current Year Ended December 31
Sales				$	1,872,000
Cost of goods sold					1,102,000
Gross profit					770,000
Operating expenses
Depreciation expense	$	54,000
Other expenses		510,000			564,000
Income before taxes					206,000
Income taxes expense					44,400
Net income				$	161,600

Additional Information on Current Year Transactions

1. Purchased equipment for $63,100 cash.
2. Issued 13,600 shares of common stock for $5 cash per share.
3. Declared and paid $105,000 in cash dividends.

Problem 16-8AB Direct: Statement of cash flows LO P5

Required:
Prepare a complete statement of cash flows using the direct method for the current year. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1