Question

Golden Corp., a merchandiser, recently completed its 2017 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, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company’s balance sheets and income statement follow. GOLDEN CORPORATION Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash $ 176,000 $ 120,200 Accounts receivable 101,000 83,000 Inventory 619,000 538,000 Total current assets 896,000 741,200 Equipment 367,300 311,000 Accum. depreciation—Equipment (164,000 ) (110,000 ) Total assets $ 1,099,300 $ 942,200 Liabilities and Equity Accounts payable $ 111,000 $ 83,000 Income taxes payable 40,000 31,100 Total current liabilities 151,000 114,100 Equity Common stock, $2 par value 616,000 580,000 Paid-in capital in excess of par value, common stock 208,000 178,000 Retained earnings 124,300 70,100 Total liabilities and equity $ 1,099,300 $ 942,200 GOLDEN CORPORATION Income Statement For Year Ended December 31, 2017 Sales $ 1,852,000 Cost of goods sold 1,098,000 Gross profit 754,000 Operating expenses Depreciation expense $ 54,000 Other expenses 506,000 560,000 Income before taxes 194,000 Income taxes expense 38,800 Net income $ 155,200 rchased equipment for $56,300 cash. Issued 13,200 shares of common stock for $5 cash per share. Declared and paid $101,000 in cash dividends. Required: Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method

Answer 1