Answered step by step
Verified Expert Solution
Link Copied!

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 credits

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.

GOLDEN CORPORATION
Comparative Balance Sheets
December 31
Current Year Prior Year
Assets
Cash $ 172,000 $ 115,800
Accounts receivable 95,000 79,000
Inventory 613,000 534,000
Total current assets 880,000 728,800
Equipment 356,500 307,000
Accumulated depreciationEquipment (162,000) (108,000)
Total assets $ 1,074,500 $ 927,800
Liabilities and Equity
Accounts payable $ 103,000 $ 79,000
Income taxes payable 36,000 29,100
Total current liabilities 139,000 108,100
Equity
Common stock, $2 par value 601,600 576,000
Paid-in capital in excess of par value, common stock 210,400 172,000
Retained earnings 123,500 71,700
Total liabilities and equity $ 1,074,500 $ 927,800

GOLDEN CORPORATION
Income Statement
For Current Year Ended December 31
Sales $ 1,832,000
Cost of goods sold 1,094,000
Gross profit 738,000
Operating expenses (excluding depreciation) 502,000
Depreciation expense 54,000
Income before taxes 182,000
Income taxes expense 33,200
Net income $ 148,800

Additional Information on Current Year Transactions

Purchased equipment for $49,500 cash.

Issued 12,800 shares of common stock for $5 cash per share.

Declared and paid $97,000 in cash dividends.

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.)

GOLDEN CORPORATION

Statement of Cash Flows

For Current Year Ended December 31

Cash flows from operating activities

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 $(94,000)

Cash flows from financing activities:

Net increase (decrease) in cash $(94,000)

Cash balance at December 31, prior year

Cash balance at December 31, current year$(94,000)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management and Cost Accounting

Authors: Alnoor Bhimani, Charles T. Horngren, Srikant M. Datar, George Foster

4th edition

1405888202, 978-0273711490, 273711490, 978-1405888202

More Books

Students also viewed these Accounting questions

Question

What other requirements do they have for admission?

Answered: 1 week ago

Question

What is the specific purpose of an acceptable use policy?

Answered: 1 week ago