Question

Required information Use the following information for the Problems below. (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 Current Year Prior Year $ 177,000 102,500 620, 500 900,000 370,000 (164,500) $1,105,500 $ 121,300 84,000 539,000 744, 300 312,000 (110,500) $ 945, 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 $ $ 113,000 41,000 154,000 84,000 31, 600 115, 600 607, 600 219, 400 124,500 581, 000 179,500 69, 700 < Prev 4 or 4 # Next > OMED

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Answer 1

Solution GOLDEN CORPORATION Statement of Cash Flows (Direct Method) For Current Year Ended December 31 Cash flows from operating activities: Cash received from customers (WN-1) $1,838,500 Cash paid for merchandise (WN-2) ($1,151,500) Cash paid for operating expenses ($507,000) Cash paid for income taxes (WN-3) ($30,800) Net cash flow from operating activities $149,200 Cash flows from investing activities: Cash paid for purchase of equipment Net cash used for investing activities ($58,000) ($58,000) Cash flows from financing activities: Cash received from issue of common stock ($5 x 13,300) Cash paid for dividends Net cash used for financing activities $66,500 ($102,000) ($35,500) Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year er 31, current year $55,700 $121,300 $177,000 WN-1: Cash received from Customers Sales Add: Beginning Accounts Receivables Less: Ending Accounts Receivable Cash received from customers $1,857,000 $ 84,000 ($102,500) $1,838,500 WN-2 : Cash paid for merchandise Cost of goods sold Add: Ending Inventories Less: Beginning Inventories Purchases Add: Beginning Accounts Payable Less: Ending Accounts Payable Cash paid for inventories $1,099,000 $620,500 ($539,000) $1,180,500 $84,000 ($113,000) $1,151,500 WN-3: Cash paid for income taxes Income taxes expense Add: Beginning income taxes payable Less: Ending income taxes payable Cash paid for operating expenses $40,200 $31,600 ($41,000) $30,800