Golden Corp., a merchandiser, recently completed its 2015 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 companys balance sheets and income statement follow.

GOLDEN CORPORATION Comparative Balance Sheets December 31, 2015 and 2014
	2015			2014
Assets
Cash	$	239,000		$	171,000
Accounts receivable		103,000			83,000
Inventory		639,000			545,000
Total current assets		981,000			799,000
Equipment		385,000			337,000
Accum. depreciationEquipment		(191,000	)		(123,000	)
Total assets	$	1,175,000		$	1,013,000
Liabilities and Equity
Accounts payable	$	105,000		$	90,000
Income taxes payable		54,000			44,000
Total current liabilities		159,000			134,000
Equity
Common stock, $2 par value		632,000			606,000
Paid-in capital in excess of par value, common stock		218,000			179,000
Retained earnings		166,000			94,000
Total liabilities and equity	$	1,175,000		$	1,013,000

GOLDEN CORPORATION Income Statement For Year Ended December 31, 2015
Sales				$	1,887,000
Cost of goods sold					1,105,000
Gross profit					782,000
Operating expenses
Depreciation expense	$	68,000
Other expenses		513,000			581,000
Income before taxes					201,000
Income taxes expense					26,000
Net income				$	175,000

Additional Information on Year 2015 Transactions
a.	Purchased equipment for $48,000 cash.
b.	Issued 13,000 shares of common stock for $5 cash per share.
c.	Declared and paid $103,000 in cash dividends.

1. 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.)

2. A Company is able to produce two products, G and B, with the same machine in its factory. The following information is available.

The company presently operates the machine for a single eight-hour shift for 22 working days each month. Management is thinking about operating the machine for two shifts, which will increase its productivity by another eight hours per day for 22 days per month. This change would require $10,000 additional fixed costs per month. (Round hours per unit answers to 1 decimal place. Enter operating losses, if any, as negative values.)

GOLDEN CORPORATION Statement of Cash Flows For Year Ended December 31, 2015 Cash flows from operating activities Net Income 175,000 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense Income taxes payable increase Accounts receivable increase Inventory increase Accounts payable increase 68,000 Net cash provided by operating activites $ 243,000 Cash flows from investing activities Cash paid for equipment Net cash used in investing activities Cash flows from financing activities: Cash received from stock issuance Cash paid for cash dividends Net cash used in financing activities Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year 243,000 243,000