Question

Required information Golden Corp., a merchandiser, recently completed its 2017 operations. For the year, (1) all...

Required information

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
Assets
Cash $ 177,000 $ 121,300
Accounts receivable 102,500 84,000
Inventory 620,500 539,000
Total current assets 900,000 744,300
Equipment 370,000 312,000
Accum. depreciation—Equipment (164,500 ) (110,500 )
Total assets $ 1,105,500 $ 945,800
Liabilities and Equity
Accounts payable $ 113,000 $ 84,000
Income taxes payable 41,000 31,600
Total current liabilities 154,000 115,600
Equity
Common stock, $2 par value 618,000 581,000
Paid-in capital in excess of par value, common stock 209,000 179,500
Retained earnings 124,500 69,700
Total liabilities and equity $ 1,105,500 $ 945,800

  

GOLDEN CORPORATION
Income Statement
For Year Ended December 31, 2017
Sales $ 1,857,000
Cost of goods sold 1,099,000
Gross profit 758,000
Operating expenses
Depreciation expense $ 54,000
Other expenses 507,000 561,000
Income before taxes 197,000
Income taxes expense 40,200
Net income $ 156,800

Additional Information on Year 2017 Transactions

  1. Purchased equipment for $58,000 cash.
  2. Issued 13,300 shares of common stock for $5 cash per share.
  3. Declared and paid $102,000 in cash dividends.


Required:
Prepare a complete statement of cash flows; report its cash flows from operating activities according to the direct method. (Amounts to be deducted should be indicated with a minus sign.)
  

Homework Answers

Answer #1

Statement of cash flow :

Cash flow from operating activities
Cash received from customer (1857000-18500) 1838500
Cash paid to supplier (1099000+81500-29000) -1151500
Cash paid for expense -507000
Cash paid for income tax (40200-9400) -30800
-1689300
Net cash flow from operating activities 149200
Cash flow from investing activities
Purchase equipment -58000
Cash flow from financing activities
Issue common Stock (13300*5) 66500
Dividend paid -102000
Net cash used in financing activities -35500
Net cash increase (decrease) 55700
Beginning Cash 121300
Ending Cash 177000
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