Question

Required information (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, () 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 $ 169,000 $ 112,500 76,000 531,000 719,500 304,000 (106,500) $917,000 Accounts receivable Inventory Total current assets Equipment Accum. depreciation-Equipment 90,500 608,500 868,000 348,400 (160,500) $1,0ss,900 Total assets Liabilities and Equity Accounts payable 97,000 33,000 130,000 $ 76,000 27,600 183,600 Income taxes payable Total current liabilities Equity Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings 598,000 573,000 167,500 205,000 122,900 72,900 $917,0ee Total liabilities and equity $1,055,90e

Answer 1

Correct Answer:

GOLDEN CORPORATION
Cash flow Statement
For the Year ended December 31
Cash Flow from Operating Activities:
Net Income		$ 144,000
Adjustments to reconcile net income to net cash provided by operations
Income statement items not affecting cash
Depreciation Expense	$ 54,000
Changes in current assets and current liabilities
Increase in Accounts Receivables	-$ 14,500
Increase in Inventory	-$ 77,500
Increase in Accounts payable	$ 21,000
Increase in Income taxes payable	$ 5,400
		-$ 11,600
A. Cash Outflow from Operating Activities		$ 132,400
cash flow from investing activities
Purchase of Equipment	-$ 44,400
B.Net cash used by investing activities		-$ 44,400
Cash flows from Financing activities
Payment of Dividend	-$ 94,000
Issue of Common Stock	$ 62,500
C. Net cash Used in financing activities		-$ 31,500
(A+B+C) Net increase (Decrease) in cash and Cash Equivalent		$ 56,500
Add: Beginning cash Balance		$ 112,500
Ending Cash Balance		$ 169,000

End of answer.

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