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 16-8AB Direct: Statement of cash flows LO P1, P3, P5

Additional Information on Year 2017 Transactions

Purchased equipment for $64,800 cash.

Issued 13,700 shares of common stock for $5 cash per share.

Declared and paid $106,000 in cash dividends.

Required:
Prepare a complete statement of cash flows; report its cash flows from operating activities according to the direct method. (Amounts to be deducted should be indicated with a minus sign.)

	GOLDEN CORPORATION Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities $0 0 Cash flows from financing activities 0 Net increase (decrease) in cash $0 Cash balance at beginning of year Cash balance at end of year $0

Answer 1