Question

 

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		$	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			606,400						580,000
Paid-in capital in excess of par value, common stock			217,600						178,000
Retained earnings			124,300						70,100
Total liabilities and equity		$	1,099,300					$	942,200

  

GOLDEN CORPORATION Income Statement For Current Year Ended December 31
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

Additional Information on Current Year Transactions

1. Purchased equipment for $56,300 cash.
2. Issued 13,200 shares of common stock for $5 cash per share.
3. Declared and paid $101,000 in cash dividends.

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.)

GOLDEN CORPORATION Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities           Adjustments to reconcile net income to net cash provided by operations:                                         $0 Cash flows from investing activities                   0 Cash flows from financing activities:                         0 Net increase (decrease) in cash $0 Cash balance at December 31, prior year   Cash balance at December 31, current year $0

Answer 1