Question

Required information

Use the following information for the Problems below.

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	$	181,000			$	125,700
Accounts receivable		108,500				88,000
Inventory		626,500				543,000
Total current assets		916,000				756,700
Equipment		380,800				316,000
Accum. depreciation—Equipment		(166,500	)			(112,500	)
Total assets	$	1,130,300			$	960,200
Liabilities and Equity
Accounts payable	$	121,000			$	88,000
Income taxes payable		45,000				33,600
Total current liabilities		166,000				121,600
Equity
Common stock, $2 par value		626,000				585,000
Paid-in capital in excess of par value, common stock		213,000				185,500
Retained earnings		125,300				68,100
Total liabilities and equity	$	1,130,300			$	960,200

  

GOLDEN CORPORATION Income Statement For Year Ended December 31, 2017
Sales				$	1,877,000
Cost of goods sold					1,103,000
Gross profit					774,000
Operating expenses
Depreciation expense	$	54,000
Other expenses		511,000			565,000
Income before taxes					209,000
Income taxes expense					45,800
Net income				$	163,200

Problem 16-7AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4

Additional Information on Year 2017 Transactions

Net income was $163,200.

Accounts receivable increased.

Inventory increased.

Accounts payable increased.

Income taxes payable increased.

Depreciation expense was $54,000.

Purchased equipment for $64,800 cash.

Issued 13,700 shares at $5 cash per share.

Declared and paid $106,000 of cash dividends.

    
Required:
Prepare a complete statement of cash flows using a spreadsheet; report operating activities under the indirect method. (Enter all amounts as positive values.)

GOLDEN CORPORATION Spreadsheet for Statement of Cash Flows For Year Ended December 31, 2017 Analysis of Changes December 31, 2016 Debit Credit December 31, 2017 Balance sheet—debit balance accounts Cash $125,700 $181,000 Accounts receivable 88,000 Inventory 543,000 Equipment 316,000 $1,072,700 $181,000 Balance sheet—credit balance accounts Accumulated depreciation—Equipment $112,500 Accounts payable 88,000 Income taxes payable 33,600 Common stock, $2 par value 585,000 Paid-in capital in excess of par value, common stock 185,500 Retained earnings 68,100 $1,072,700 $0 Statement of cash flows Operating activities Investing activities Financing activities $0 $0

Answer 1

GOLDEN CORPORATION
Spreadsheet for Statement of Cash Flows
For Year Ended December 31, 2017
		Analysis of Changes
	31-Dec-16	Debit	Credit	31-Dec-17
Balance sheet—debit balance accounts
Cash	$125,700			$181,000
Accounts receivable	88,000	20,500		108500
Inventory	543,000	83,500		626500
Equipment	316000	64,800		380,800
	$1,072,700			$1,296,800
Balance sheet—credit balance accounts
Accumulated depreciation—Equipment	$112,500		$54,000	166500
Accounts payable	88,000		33,000	121000
Income taxes payable	33,600		11,400	45000
Common stock, $2 par value	585,000		41,000	626000
Paid-in capital in excess of par value, common stock	185,500		27,500	213000
Retained earnings	68,100	106,000	163,200	125300
	$1,072,700			$1,296,800
Statement of cash flows
Operating activities		163,200
Depreciation expense	$54,000
Increase in accounts receivable	-20,500
Increase in accounts inventory	-83,500
Increase in accounts payable	33,000
Increase in incometax payable	11,400
		($5,600)
		$157,600
Investing activities
Purchased equipment	-64800
		-64800
Financing activities
Cash paid for dividends	-106000
Cash received from note payable	68500
		-37500
		$55,300
Opeaning cash balance.		$125,700
ending cash balance		$181,000