Golden Corp., a merchandiser, recently completed its 2017 operations. For the ye

Question

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 Compar ative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets $165, 000 $ 108, 100 72, 000 527, 000 707, 100 300, 000 (104, 500) $902, 600 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, COUmon stOCk Retained eamings Total liabilities and equity 84, 500 602, 500 852, 000 337, 600 (158, 500) $1, 031, 100 $89, 000 $ 72, 000 25, 600 97, 600 29, 000 118, 000 594, 000 197, 000 122, 100 $1, 031, 100 569, 000 161, 500 74, 500 $902, 600 GOLDEN CORPORATION Income Statement For Year Ended December 31, 201'7 Sales Cost of goods sold Gross profit Operating expenses $1, 797, 000 1,087, 000 710, 000 $54, 000 495, 000 Depreciation expense Other expenses Income before taxes Income taxes expense Net income 549, 000 161, 000 23, 400 $137, 600

Explanation / Answer

GOLDEN CORPORATION Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Net Income $137,600 Adjustments to reconcile net income to net cash provided by operations: Accounts receivable increase -12,500 Inventory increase -75,500 Accounts payable increase 17,000 Income taxes payable increase 3,400 Depreciation expense 54,000 Net cash provided by operating activities 124000 Cash flows from investing activities: Cash paid for equipment -37,600 Net cash used in investing activities -37600 Cash flows from financing activities: Cash received from stock issuance 60,500 Cash paid for cash dividends -90,000 Net cash used in financing activities -29500 Net increase (decrease) in cash 56900 Cash balance at beginning of year 108,100 Cash balance at end of year 165000

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