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Chapter 12 Problems

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Item 4

Item 4 Part 1 of 2 4 points

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[The following information applies to the questions displayed below.] Golden Corp.'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, (5) Other Expenses are all cash expenses, and (6) 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		$	175,000					$	119,100
Accounts receivable			99,500						82,000
Inventory			617,500						537,000
Total current assets			892,000						738,100
Equipment			364,600						310,000
Accum. depreciationEquipment			(163,500	)					(109,500	)
Total assets		$	1,093,100					$	938,600
Liabilities and Equity
Accounts payable		$	109,000					$	82,000
Income taxes payable			39,000						30,600
Total current liabilities			148,000						112,600
Equity
Common stock, $2 par value			605,200						579,000
Paid-in capital in excess of par value, common stock			215,800						176,500
Retained earnings			124,100						70,500
Total liabilities and equity		$	1,093,100					$	938,600

GOLDEN CORPORATION Income Statement For Current Year Ended December 31
Sales				$	1,847,000
Cost of goods sold					1,097,000
Gross profit					750,000
Operating expenses
Depreciation expense	$	54,000
Other expenses		505,000			559,000
Income before taxes					191,000
Income taxes expense					37,400
Net income				$	153,600

Additional Information on Current Year Transactions

1. Purchased equipment for $54,600 cash.
2. Issued 13,100 shares of common stock for $5 cash per share.
3. Declared and paid $100,000 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.)

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: 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