Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Golden Corporation's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all
Golden Corporation's current year income statement, comparative balance sheets, and additional information follow. 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) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. Assets Cash GOLDEN CORPORATION Comparative Balance Sheets December 31 Current Year Prior Year $ 164,000 $ 107,000 83,000 71,000 601,000 526,000 848,000 335,000 (158,000) $ 1,025,000 704,000 299,000 (104,000) $ 899,000 Accounts receivable Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets 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 Total liabilities and equity GOLDEN CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Income before taxes Income taxes expense Net income $ 1,792,000 1,086,000 706,000 494,000 54,000 158,000 22,000 $136,000 $ 87,000 $ 71,000 28,000 25,000 115,000 96,000 592,000 568,000 196,000 160,000 122,000 75,000 $ 1,025,000 $ 899,000 Assets Cash GOLDEN CORPORATION Comparative Balance Sheets December 31 Accounts receivable Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets 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 Total liabilities and equity GOLDEN CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold $ 1,792,000 1,086,000 706,000 494,000 54,000 158,000 Gross profit Operating expenses (excluding depreciation) Depreciation expense Income before taxes Income taxes expense Net income Additional Information on Current Year Transactions a. Purchased equipment for $36,000 cash. 22,000 $ 136,000 b. Issued 12,000 shares of common stock for $5 cash per share. c. Declared and paid $89,000 in cash dividends. Current Year Prior Year $ 164,000 83,000 601,000 848,000 335,000 (158,000) $ 1,025,000 $ 107,000 71,000 526,000 704,000 299,000 (104,000) $ 899,000 $ 87,000 28,000 $ 71,000 25,000 115,000 96,000 592,000 568,000 196,000 160,000 122,000 75,000 $ 1,025,000 $ 899,000 Required: Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.) Cash flows from operating activities GOLDEN CORPORATION Statement of Cash Flows For Current Year Ended December 31 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current assets and current liabilities Cash flows from investing activities Cash flows from financing activities: $ 0 + 0 Changes in current assets and current liabilities Cash flows from investing activities Cash flows from financing activities: Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0 0 0 $ 0 0 Prepare a complete statement of cash flows using a spreadsheet under the indirect method. (Enter all amounts as positive values.) GOLDEN CORPORATION Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 Analysis of Changes December 31, Prior December 31, Year Debit Credit Current Year Balance sheet-debit balance accounts Cash $ 107,000 Accounts receivable 71,000 Inventory 526,000 Equipment 299,000 $ 1,003,000 Balance sheet-credit balance accounts Accumulated depreciation-Equipment $ 104,000 Accounts payable 71,000 Income taxes payable 25,000 Common stock, $2 par value 568,000 Paid-in capital in excess of par value, common stock 160,000 Retained earnings Statement of cash flows 75,000 $ 1,003,000 Operating activities $ 164,000 Paid-in capital in excess of par value, common stock Retained earnings Statement of cash flows Operating activities Investing activities Financing activities 160,000 75,000 $ 1,003,000 Prepare a complete statement of cash flows using the direct method for the current year. (Amounts to be deducted should be indicated with a minus sign.) GOLDEN CORPORATION Statement of Cash Flows For Current Year Ended December 31. Cash flows from operating activities $ 0 Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year. 0 0 $ 0 $ 0
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started