Additional Information on Year 2017 Transactions Required: Prepare a complete st

ID: 2600167 • Letter: A

Question

Additional Information on Year 2017 Transactions

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.)

Required information [The following information applies to the questions displayed below.] Golden Corp., a merchandiser, recently completed its 2017 operations. For the yea al 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 follovw GOLDEN CORPORATION Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 AssetS Cash Accounts receivable Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets $ 176,000 $ 120,200 83,000 538,000 741,2060 311,000 0) (110,000) $1,099,300 942,200 101,000 619,000e 896,000 367,300 164,000 Liabilities and Equity Accounts payable Income taxes payable Total current liabilities Equity Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings $ 111,000 $ 40,000 151,000 83,000 31,100 114,100 616,000 208,000 580,000 178,000 124,300195100 $1,099,300 942,200 Total liabilities and equity GOLDEN CORPORATION Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $1,852,000 1,098,000 754,000 Depreciation expense $ 54,000 506,000 Other expenses Income before taxes Income taxes expense Net income 560,000 194,000 38,800 $ 155,200

Explanation / Answer

Golden Corporation

CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31,2017

CASH FLOW FROM OPERATING ACTIVITIES

Net Income

1,55,200.00

Adjustment For non cash items and working capital changes:

Loss on sale of Investments

Depreciation

54,000.00

Increase in Accounts receivable

-18,000.00

Increase in inventory

-81,000.00

Increase in Accounts payable

28,000.00

Increase in Income tax payable

8,900.00

NET CASH FROM OPERATING ACTIVITIES (A)

1,47,100.00

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of land

Purchase of Equipment

-56,300.00

Sale of investment

NET CASH FROM INVESTING ACTIVITIES (B)

-56,300.00

CASH FLOW FROM FINANCING ACTIVITIES

Issue of new shares of common stock

66,000.00

Payment of dividend

-1,01,000.00

NET CASH FROM FINANCING ACTIVITIES (C)

-35,000.00

NET CHANGES IN CASH AND CASH EQUIVALENTS (A+B+C)

55,800.00

ADD: OPENING CASH AND CASH EQUIVALENTS

1,20,200.00

CLOSING CASH AND CASH EQUIVALENTS

1,76,000.00