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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. 2016 GOLDEN CORPORATION Comparative Balance Sheets December 31, 2017 and 2016 2017 Assets Cash $ 183,000 Accounts receivable 111,500 Inventory 629,500 Total current assets 924,000 Equipment 386,200 Accum. depreciation-Equipment (167,500) Total assets $1,142,700 Liabilities and Equity Accounts payable 125,000 Income taxes payable 47,000 Total current liabilities 172,000 Equity Common stock, $2 par value 630,000 Paid-in capital in excess of par value, 215,000 common stock Retained earnings 125,700 Total liabilities and equity $1,142,700 $ 127,900 90,000 545,000 762,900 318,000 (113,500) 967,400 $ 90,000 34,600 124,600 587,000 188,500 67,300 $ 967,400 GOLDEN CORPORATION Income Statement For Year Ended December 31, 2017 Sales $1,887,000 Cost of goods sold 1,105,000 Gross profit 782,000 Operating expenses Depreciation $ 54,000 expense Other expenses 513,000 567,000 Income before 215,000 taxes Income taxes 48,600 expense Net income $ 166,400 GOLDEN CORPORATION Statement of Cash Flows For Year Ended December 31, 2017 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 0 $ Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year $ 0 Forten Company, a merchandiser, recently completed its calendar-year 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, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's income statement and balance sheets follow. 2016 FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 2017 Assets Cash $ 79,900 Accounts receivable 95,970 Inventory 305,656 Prepaid expenses 1,410 Total current assets 482,936 Equipment 137,500 Accum. depreciation-Equipment (46,625) Total assets $573, 811 Liabilities and Equity Accounts payable $ 73, 141 Short-term notes payable 16,000 Total current liabilities 89, 141 Long-term notes payable 55,000 Total liabilities 144, 141 Equity Common stock, $5 par value 202,750 Paid-in capital in excess of par, 57,500 common stock Retained earnings 169,420 Total liabilities and equity $573,811 $ 93,500 70,625 271,800 2,295 438, 220 128,000 (56,000) $510, 220 $144,675 10,000 154,675 68,750 223, 425 170,250 0 116,545 $510,220 FORTEN COMPANY Income Statement For Year Ended December 31, 2017 Sales $682,500 Cost of goods sold 305,000 Gross profit 377,500 Operating expenses Depreciation expense $ 40,750 Other expenses 152,400 193, 150 Other gains (losses) Loss on sale of (25,125) equipment Income before taxes 159, 225 Income taxes expense 52,250 Net income $ 106,975 FORTEN COMPANY Statement of Cash Flows For Year Ended December 31, 2017 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 0 $ Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year $ 0
