Question

(4) all debits to Accounts Payable reflect cash payments for inventory. (5) Other Expenses are all cash e Income Taxes Payable reflects the accrual and cash payment of taxes. GOLDEN CORPORATION Comparative Balance Sheets December 31 Current Year Prior 164,000 83,000 601,000 848,000 335,000 (158,000) $1,025,000 $ 107,000 71,000 526,000 704,000 299,000 (104,000) $ 899,000 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 87,000 28,000 115,000 $ 71,000 125,000 96,000 592,000 196,000 122,000 $1,025,000 568,000 160,000 75,000 $ 899,000 GOLDEN CORPORATION Income Statement For Current Year Ended December 31

Answer 1

	Golden Corporation
	Date	Accounts	Debit	Credit	Calculation
1	31-Dec	Cash	1,780,000
		Accounts Receivable	12,000		=71,000-83,000
		Sales		1,792,000	Income statement
2	31-Dec	Inventory	75,000		=526,000-601,000
		Cost of goods sold	1,086,000		Income statement
		Accounts Payable		16,000	=87,000-71,000
		Cash		1,145,000
3	31-Dec	Depreciation expense	54,000		Income statement
		Accum. Depreciation-Equipment		54,000	=158,000-104,000
4	31-Dec	Operating other expenses	494,000		Income statement
		Cash		494,000
5	31-Dec	Income tax expense	22,000		Income statement
		Income tax payable		3,000	=28,000-25,000
		Cash		19,000
6	31-Dec	Equipment	36,000
		Cash		36,000
7	31-Dec	Cash	60,000		=12,000*5
		Common Stock, @2 par value		24,000	=592,000-568,000
		Paid in capital in excess of par value, common stock		36,000	=196,000-160,000
8	31-Dec	Dividends	89,000
		Cash		89,000
9	31-Dec	Sales	1,792,000
		Income Summary		1,792,000
10	31-Dec	Income Summary	1,656,000
		Cost of goods sold		1,086,000
		Operating other expenses		494,000
		Depreciation expense		54,000
		Income tax expense		22,000
11	31-Dec	Income Summary	136,000
		Retained Earnings		136,000

Golden Corporation Cashflow Statement - Direct method Calculation 1,780,000 Cash flows from from Operating Activities Cash collections from customers Cash payments Cash paid to suppliers for Inventory Cash paid for Operating other expenses Cash paid for Income Taxes Total cash payments Net Cash Provided/(Used) by Operating Activities 1,145,000 494,000 19,000 1,658,000 122,000 Cash flows from from Investing Activities Purchase of Equipment Net Cash Provided/(Used) by Investing Activities (36,000) (36,000) =12,000*5 60,000 (89,000) Cash flows from from Financing Activities Proceeds from issue of common stock Dividends paid Net Cash Provided/(Used) by Financing Activities Net Change in Cash Cash at Beginning of Period Cash at End of Period (29,000) 57,000 107,000 164,000

Workings Cashflow Statement - Direct method Cash flows from from Operating Activities Sales 1,792,000 71,000 (83,000) Closing Accounts Receivable Cash collections from customers 1,780,000 Cash payments Cost of goods sold Opening Accounts Payable Closing Accounts Payable Closing Inventory Opening Inventory Cash paid to Suppliers 1,086,000 71,000 (87,000) 601,000 (526,000) 1,145,000 Cash paid for operating other expenses 494,000 22,000 25,000 (28,000) Income tax expense Opening Income tax payable Closing Income tax payable Cash paid for Income taxes Total Cash Payments Net Cash Provided/(Used) by Operating Activities 19,000 1,658,000 122,000

Golden Corporation Cashflow Statement - Indirect method Calculation Cash flows from Operating Activities Net income 136,000 Adjustments to reconcile net income to net cash from operating activities Depreciation expense 54,000 Changes in Working Capital Accounts Receivable =71,000-83,000 Inventory (75,000) =526,000-601,000 Accounts Payable 16,000 =87,000-71,000 Income taxes Payable 3,000 =28,000-25,000 Net Cash Provided/(Used) by Operating Activities 122,000 Cash flows from Investing Activities Purchase of Equipment Net Cash Provided/(Used) by Investing Activities (36,000) (36,000) =12,000*5 60,000 (89,000) Cash flows from Financing Activities Proceeds from issue of common stock Dividends paid Net Cash Provided/(Used) by Financing Activities Net Change in Cash Cash at Beginning of Period Cash at End of Period (29,000) 57,000 107,000 164,000