In: Accounting
Required information
[The following information applies to the questions
displayed below.]
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 |
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Current Year | Prior Year | ||||||||||
Assets | |||||||||||
Cash | $ | 184,000 | $ | 129,000 | |||||||
Accounts receivable | 113,000 | 91,000 | |||||||||
Inventory | 631,000 | 546,000 | |||||||||
Total current assets | 928,000 | 766,000 | |||||||||
Equipment | 388,900 | 319,000 | |||||||||
Accum. depreciation—Equipment | (168,000 | ) | (114,000 | ) | |||||||
Total assets | $ | 1,148,900 | $ | 971,000 | |||||||
Liabilities and Equity | |||||||||||
Accounts payable | $ | 127,000 | $ | 91,000 | |||||||
Income taxes payable | 48,000 | 35,100 | |||||||||
Total current liabilities | 175,000 | 126,100 | |||||||||
Equity | |||||||||||
Common stock, $2 par value | 616,000 | 588,000 | |||||||||
Paid-in capital in excess of par value, common stock | 232,000 | 190,000 | |||||||||
Retained earnings | 125,900 | 66,900 | |||||||||
Total liabilities and equity | $ | 1,148,900 | $ | 971,000 | |||||||
GOLDEN CORPORATION Income Statement For Current Year Ended December 31 |
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Sales | $ | 1,892,000 | ||||
Cost of goods sold | 1,106,000 | |||||
Gross profit | 786,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 54,000 | ||||
Other expenses | 514,000 | 568,000 | ||||
Income before taxes | 218,000 | |||||
Income taxes expense | 50,000 | |||||
Net income | $ | 168,000 | ||||
Additional Information on Current Year
Transactions
Required:
Prepare a complete statement of cash flows using the indirect
method for the current year. (Amounts to be deducted
should be indicated with a minus sign.)
Answer:
GOLDEN CORPORATION |
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Statement of Cash Flows |
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For Year Ended December 31,Current year |
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Cash flows from operating activities |
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Net Income |
168000 |
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Adjustments to reconcile net income to net cash provided by operations: |
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Accounts receivable increase (91000-113000) |
-22000 |
|
Inventory increase(546000-631000) |
-85000 |
|
Accounts payable increase(127000-91000) |
36000 |
|
Income taxes payable increase(48000-35100) |
12900 |
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Depreciation expense |
54000 |
|
-4100 |
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Net cash provided by operating activities |
163900 |
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Cash flows from investing activities: |
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Cash paid for equipment |
-69900 |
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Net cash used in investing activities |
-69900 |
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Cash flows from financing activities: |
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Cash received from stock issuance (14000*5) |
70000 |
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Cash paid for cash dividends |
-109000 |
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Net cash used in financing activities |
-39000 |
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Net increase (decrease) in cash |
55000 |
|
Cash balance at beginning of year |
129000 |
|
Cash balance at end of year |
184000 |