80.2K

Verified Solution

Link Copied!

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 $ 181,000 108,500 626,500 916,000 380,800 (166,500) $1,130,300 $ 125,700 88,000 543,000 756,700 316,000 (112,500) $ 960,200 Assets Cash Accounts receivable Inventory Total current assets Equipment Accum. 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 $ $ 121,000 45,000 166,000 88,000 33,600 121,600 612,400 226,600 125,300 $1,130,300 585,000 185,500 68,100 $ 960,200 GOLDEN CORPORATION Income Statement For Current Year Ended December 31 Sales $1,877,000 Cost of goods sold 1,103,000 Gross profit 774,000 Operating expenses Depreciation expense $ 54,000 Other expenses 511,000 565,000 Income before taxes 209,000 Income taxes expense 45,800 Net income $ 163,200 Additional Information on Current Year Transactions a. Purchased equipment for $64,800 cash. b. Issued 13,700 shares of common stock for $5 cash per share. c. Declared and paid $106,000 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 Net income Adjustments to reconcile net income to net cash provided by operations: Depreciation expense Cash paid for equipment Accounts receivable increase Inventory increase Prepaid expense decrease Prepaid expense decrease Accounts payable decrease 0 Cash flows from investing activities Cash paid for equipment 0 Cash flows from financing activities: 0 $ 0 Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0 Required: 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 Cash received from customers Increase in accounts receivable Increase in inventory $ 0 Cash flows from investing activities Cash flows from investing activities 0 Cash flows from financing activities 0 $ 0 Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ 0

Answer & Explanation Solved by verified expert

See Answer