Question

dew Rome - 12 A A Aav do 9 Uab XX APAE 3A1 - AaBbcede AaBbCcDc AaBb Cc Aabbccc AaB - 1 Normal 1 No Spac... Heading 1 Heading 2 Title = Find Gc Replace Select Dictate Font Paragraph Styles Editing Voice Additional Information on Current Year Transactions Prior Year a. Purchased equipment for $51,200 cash b. Issued 12,900 shares of common stock for 55 cash per share Declared and paid $98,000 in cash dividends GOLDEN CORPORATION Comparative Balance Sheets December 31 Current Year Assets Cash S 173,000 Accounts receivable 96,500 Inventory 614,500 Total current assets 884.000 Equipment 359, 200 Acum depreciation Equipment (1627 500) Total assets 51,080, 700 Liabilities and Equity Accounts payable $ 105,000 Income taxes payable 37,000 Total current abilities 142.000 Equity Common stock. $2 par value 602,800 Paid-in capital in excess of par 212,200 value, common stock Retained earnings 123,700 Total liabilities and equity $1,080, 700 $ 116, 900 80,000 535,000 731, 900 308,000 109.500) $ 931,400 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 mines sign.) $ 80,000 29. 600 109,600 577,000 173,500 71,300 $ 931,400 GOLDEN CORPORATION Income Statement For Current Year Ended December 31 Sales $1,837.000 Cost of goods sold 1.095,000 Gross profit 742,000 Operating expenses Depreciation expenses 54,000 Other expenses 503,000 557,000 Income before taxes 185,000 Income taxes expense 34,600 Net income $ 150, 400 7 wordsLX Focus E- Gew@^ o ao e Type here to search

Answer 1

Solution

GOLDEN CORPORATION
Cash flow Statement
For the Year ended December 31, Current year
Cash Flow from Operating Activities:
Net Income	$     150,400.00
Adjustments to reconcile net income to net cash provided by operations
Income statement items not affecting cash
Depreciation Expense	$        54,000.00
Changes in current assets and current liabilities
Increase in Accounts Receivables	$     (16,500.00)
Increase in Inventory	$     (79,500.00)
Increase in Accounts payable	$        25,000.00
Increase in Income taxes payable	$          7,400.00
A. Cash Outflow from Operating Activities		$   140,800.00
Cash flow from investing activities
Purchase of Equipment	$     (51,200.00)
B.Net cash used by investing activities		$   (51,200.00)
Cash flows from Financing activities
Payment of Dividend	$     (98,000.00)
Issue of Common Stock	$        64,500.00
C. Net cash Used in financing activities		$   (33,500.00)
(A+B+C) Net increase (Decrease) in cash and Cash Equivalent		$     56,100.00
Cash balance, December 31, prior year		$   116,900.00
Cash balance, December 31, current year		$   173,000.00

.General notes for cash flow
Cash is increased when Current liability increase or Current asset Decrease.
Cash is Decreased when Current liability Decrease or Current asset Increase.
Depreciation or loss on sale of any asset is a non cash expense hence it will be added to net income to get operating cash
Profit on sale of asset or investment is a non cash profit and hence will be deducted from operating income.