The following balance sheets are taken from the records of Golding Company (numbers are expressed in thousands):
Fantastic news! We've Found the answer you've been seeking!
Question:
The following balance sheets are taken from the records of Golding Company (numbers are expressed in thousands):
20X1 | 20X2 | |
Assets | ||
Cash | $130,000 | $150,000 |
Accounts receivable | 25,000 | 20,000 |
Plant and equipment | 50,000 | 60,000 |
Accumulated depreciation | (20,000) | (25,000) |
Land | 10,000 | 10,000 |
Total assets | $195,000 | $215,000 |
Liabilities and equity | ||
Accounts payable | $ 10,000 | $ 5,000 |
Bonds payable | 8,000 | 18,000 |
Common stock | 120,000 | 120,000 |
Retained earnings | 57,000 | 72,000 |
Total liabilities and equity | $195,000 | $215,000 |
Additional information is as follows:
A. | Equipment costing $10,000,000 was purchased at year-end. No equipment was sold; and |
B. | Net income for the year was $25,000,000; $10,000,000 in dividends were paid. |
Required:
1. | Prepare a statement of cash flows using the indirect method. |
2. | Conceptual Connection: Assess Golding’s ability to use cash to acquire Lemmons Company. Consider the information in Exhibit 14.2 (p. 795) and Example 14.6 (p. 800) as part of your analysis. |
Related Book For
Accounting Information Systems
ISBN: 9780132871938
11th Edition
Authors: George H. Bodnar, William S. Hopwood
Posted Date: