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, (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 Prior Year Current Year Assets Cash Accounts receivable Inventory 165,000 84,500 602, 500 108,100 72,e0e 527,000 Total current assets 707,100 зее, өее (104,500) 852, eee 337,600 (158,500) Equipment Accum. depreciation-Equipment $1,031,100 Total assets 902,600 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 $72,000 25,600 89,000 29,000 118,000 97,600 569,e0e 161,500 74,500 593,200 197,800 122,100 Total liabilities and equity $1,031,100 902,600

Answer 1

Cash flows For current year ended December 31 Analysis of changes December 31, Prior year December 31, Current year Debit Credit Balance sheet-debit balance accounts Cash Accounts receivable Inventory Equipment $108,100 $72,000 $527,000 $300,000 $56,900 $12,500 $75,500 $37,600 $165,000 $84,500 $602,500 $337,600 Balance sheet-credit balance accounts Accumulated depreciation-equipment Accounts payable Income taxes payable Common stock, $2 par value Paid-in capital in excess of par value, common stod Retained earnings $104,500 $72,000 $25,600 $569,000 $161,500 $74,500 $54,000 $17,000 $3,400 $24,200 $35,500 $47,600 $158,500 $89,000 $29,000 $593,200 $197,000 $122,100

$137,600 $54,000 -$12,500 -$75,500 $17,000 $3,400 Statement of cash flows Operating activities Net income Adjustments: Depreciation Accounts receivable Inventory Accounts payable Income taxes payable Cash flow from operating activities Investing activities Purchase of equipment Cash flow from investing activity Financing activities Issue of common stock ($5x12,100) Dividend paid Cash flow from financing activities Add: Beginning cash balance Ending cash balance $124,000 -$37,600 $37,600 $60,500 -$90,000 -$29,500 $108,100 $165,000

Cash flows For current year ended December 31 Analysis of changes December 31, Prior year December 31, Current year Debit Credit 165000 Balance sheet-debit balance accounts Cash Accounts receivable Inventory Equipment 84500 108100 72000 527000 300000 =G6-D6 =G7-D7 G8-D8 =G9-D9 602500 337600 Balance sheet-credit balance accounts Accumulated depreciation equipment Accounts payable Income taxes payable Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings 104500 72000 25600 569000 161500 74500 =G12-D12 =G13-D13 =G14-D14 =G15-D15 =G16-D16 =G17-D17 158500 89000 29000 593200 197000 122100

137600 54000 - 12500 - 75500 17000 3400 Statement of cash flows Operating activities Net income Adjustments: Depreciation Accounts receivable Inventory Accounts payable Income taxes payable Cash flow from operating activities Investing activities Purchase of equipment Cash flow from investing activity Financing activities Issue of common stock ($5x12,100) Dividend paid Cash flow from financing activities Add: Beginning cash balance Ending cash balance =SUM(D21:D27) -37600 =D30 =12100*5 -90000 =SUM(D33:D34) 108100 =SUM(E21:E36)

Statement of cash flows For current year ended December 31 Operating activities Cash received from customers $1,784,500 Cash paid for merchandise -$1,145,500 Cash paid for other expenses -$495,000 Cash paid for income tax -$20,000 Cash flow from operating activites Investing activities Equipment purchased -$37,600 Cash flow from investing activity Financing activities Issue of common stock $60,500 Dividend paid -$90,000 $124,000 -$37,600 Add:Beginning cash balance Ending cash balance -$29,500 $108,100 $165,000

Statement of cash flows For current year ended December 31 Operating activities Cash received from customers |=72000+1797000-84500 Cash paid for merchandise =-72000-1087000+89000-602500+527000 Cash paid for other expenses -495000 Cash paid for income tax --25600-23400+29000 Cash flow from operating activites Investing activities Equipment purchased -37600 Cash flow from investing activity Financing activities Issue of common stock 60500 Dividend paid -90000 =SUM(D5:08) =D11 Add:Beginning cash balance Ending cash balance =SUM(D14:015) 108100 =SUM(E9:E17)