Question

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
Assets
Cash		$	184,000					$	129,000
Accounts receivable			113,000						91,000
Inventory			631,000						546,000
Total current assets			928,000						766,000
Equipment			388,900						319,000
Accum. depreciation—Equipment			(168,000	)					(114,000	)
Total assets		$	1,148,900					$	971,000
Liabilities and Equity
Accounts payable		$	127,000					$	91,000
Income taxes payable			48,000						35,100
Total current liabilities			175,000						126,100
Equity
Common stock, $2 par value			616,000						588,000
Paid-in capital in excess of par value, common stock			232,000						190,000
Retained earnings			125,900						66,900
Total liabilities and equity		$	1,148,900					$	971,000

  

GOLDEN CORPORATION Income Statement For Current Year Ended December 31
Sales				$	1,892,000
Cost of goods sold					1,106,000
Gross profit					786,000
Operating expenses
Depreciation expense	$	54,000
Other expenses		514,000			568,000
Income before taxes					218,000
Income taxes expense					50,000
Net income				$	168,000

Additional Information on Current Year Transactions

1. Purchased equipment for $69,900 cash.
2. Issued 14,000 shares of common stock for $5 cash per share.
3. Declared and paid $109,000 in cash dividends.

Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1