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Golden Corp., a merchandiser, recently completed its 2017 operations. 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. The company's balance sheets and income statement follow. GOLDEN CORPORATION Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 $ 167,889 87,500 605,500 860,000 343,000 (159,589) $1,043,500 $ 110,300 74,000 529,000 713,300 302,200 (105,500) $909,800 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 $ $ 93,800 31,000 124,000 74,000 26,600 100,600 598,000 199,000 122,500 $1,043,500 571,000 164,500 73,700 $909,800

Answer 1

Solution

GOLDEN CORPORATION
Cash flow Statement
For the Year ended December 31,2017
Cash Flow from Operating Activities:
Net Income	$140,800
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	-$ 13,500
Increase in Inventory	-$ 76,500
Increase in Accounts payable	$ 19,000
Increase in Income taxes payable	$ 4,400
A. Cash Outflow from Operating Activities		$ 128,200
cash flow from investing activities
Purchase of Equipment	-$ 41,000
B.Net cash used by investing activities		-$ 41,000
Cash flows from Financing activities
Payment of Dividend	-$ 92,000
Issue of Common Stock	$ 61,500
C. Net cash Used in financing activities		-$ 30,500
(A+B+C) Net increase (Decrease) in cash and Cash Equivalent		$ 56,700
Cash balance at beginning of the year		$ 110,300
Cash balance at end of the year		$ 167,000