[The following information applies to the questions displayed below.] Golden Cor

Question

[The following information applies to the questions displayed 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.

  

Additional Information on Year 2017 Transactions

Purchased equipment for $59,700 cash.

Issued 13,400 shares of common stock for $5 cash per share.

Declared and paid $103,000 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. (Amounts to be deducted should be indicated with a minus sign.)

GOLDEN CORPORATION
Comparative Balance Sheets
December 31, 2017 and 2016 2017 2016 Assets Cash $ 178,000 $ 122,400 Accounts receivable 104,000 85,000 Inventory 622,000 540,000 Total current assets 904,000 747,400 Equipment 372,700 313,000 Accum. depreciation—Equipment (165,000 ) (111,000 ) Total assets $ 1,111,700 $ 949,400 Liabilities and Equity Accounts payable $ 115,000 $ 85,000 Income taxes payable 42,000 32,100 Total current liabilities 157,000 117,100 Equity Common stock, $2 par value 620,000 582,000 Paid-in capital in excess of par value, common stock 210,000 181,000 Retained earnings 124,700 69,300 Total liabilities and equity $ 1,111,700 $ 949,400

Explanation / Answer

GOLDEN CORPORATION Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Net Income 158400 Adjustments to reconcile net income to net cash provided by operations: Accounts receivable increase -19,000 Inventory increase -82,000 Accounts payable increase 30,000 Income taxes payable increase 9,900 Depreciation expense 54,000 Net cash provided by operating activities 151300 Cash flows from investing activities: Cash paid for equipment -59,700 Net cash used in investing activities -59700 Cash flows from financing activities: Cash received from stock issuance 67,000 Cash paid for cash dividends -1,03,000 Net cash used in financing activities -36000 Net increase (decrease) in cash 55600 Cash balance at beginning of year 1,22,400 Cash balance at end of year 178000

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.