Question

Use the following information for the Problems below.

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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		$	166,000					$	109,200
Accounts receivable			86,000						73,000
Inventory			604,000						528,000
Total current assets			856,000						710,200
Equipment			340,300						301,000
Accum. depreciation—Equipment			(159,000	)					(105,000	)
Total assets		$	1,037,300					$	906,200
Liabilities and Equity
Accounts payable		$	91,000					$	73,000
Income taxes payable			30,000						26,100
Total current liabilities			121,000						99,100
Equity
Common stock, $2 par value			594,400						570,000
Paid-in capital in excess of par value, common stock			199,600						163,000
Retained earnings			122,300						74,100
Total liabilities and equity		$	1,037,300					$	906,200

  

GOLDEN CORPORATION Income Statement For Current Year Ended December 31
Sales				$	1,802,000
Cost of goods sold					1,088,000
Gross profit					714,000
Operating expenses
Depreciation expense	$	54,000
Other expenses		496,000			550,000
Income before taxes					164,000
Income taxes expense					24,800
Net income				$	139,200

Additional Information on Current Year Transactions

1. Purchased equipment for $39,300 cash.
2. Issued 12,200 shares of common stock for $5 cash per share.
3. Declared and paid $91,000 in cash dividends.

Problem 16-7AA Indirect: Cash flows spreadsheet LO P4

Required:
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 Year	Debit	Credit	December 31, Current Year
Balance sheet—debit balance accounts
Cash	$109,200			$166,000
Accounts receivable	73,000
Inventory	528,000
Equipment	301,000
	$1,011,200			$166,000
Balance sheet—credit balance accounts
Accumulated depreciation—Equipment	$105,000
Accounts payable	73,000
Income taxes payable	26,100
Common stock, $2 par value	570,000
Paid-in capital in excess of par value, common stock	163,000
Retained earnings	74,100
	$1,011,200			$0
Statement of cash flows
Operating activities

Answer 1

GOLDEN CORPORATION Spreadsheet for Statement of Cash Flows For Current Year Ended December 31 139200 Golden Corp. Cash Flow Statement - Indirect Method Cash flow from Operating Activities Net Income Adjustments to reconcile net income Depreciation Increase in AP Increase in IT payable Increase in AR Increase in Inventory Net Cash From Operating Activities Analysis of Changes December 31, Prior Year Debit Credit December 31, Current Year 54000 18000 3900 -13000 -76000 126100 Balance sheet-debit balance accounts Cash Accounts receivable Inventory Equipment 1,09,200 73,000 5,28,000 3,01,000 1011200 56,800 13,000 76,000 39,300 1 85100 1,66,000 86000 604000 340300 1196300 Cash flow from Investing Activities Purchase of equipment Net cash used by Investing Activities Cash flow from Financing Activities Balance sheet-credit balance accounts -39300 Accumulated depreciation Equipment Accounts payable Income taxes payable -39300 Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings 61000 ( 12200 * 5) -91000 Statement of cash flows -30000 Operating activities 1,05,000 73,000 26,100 5,70,000 1,63,000 74,100 1011200 54,000 18,000 3,900 24,400 36,600 48,200 185100 159000 91000 30000 594400 199600 122300 1196300 Issuance of common stock Payment of dividend Net cash used by Financing Activities Net increase in cash Opening cash balance Closing cash Balance 56800 109200 166000