Golden Corp., a merchandiser, recently completed its 2013 operations. For the ye
ID: 2444639 • Letter: G
Question
Golden Corp., a merchandiser, recently completed its 2013 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, 2013 and 2012
1,098,000
_________
187,000
Golden Corp., a merchandiser, recently completed its 2013 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, 2013 and 2012
2013 2012 Assets Cash $209,000 $150,00 Accounts receivable 89,000 76,000 Merchandise inventory 625,000 538,000 Equipment 364,000 323,000 Accum. Depreciation -Equipment -177,000 -116,000 ________ ________ Total assest $1,110,000 $971,000 Liabilities and Equity Accounts payable $91,000 $83,000 Income taxes payable 46,000 37,000 Common stock, $2 par value 614,000 592,000 Paid-in capital in excess of par value common stock 205,000 172,000 Retained earnings 154,000 87,000 _________ _______ Total liabilities and equity $1,110,000 $971,000 GOLDEN CORPORATION INCOME STATEMENT FOR YEAR ENDED DECEMBER 31,2013 Sales $1,852,0001,098,000
_________
754,000 Gross profit Operating expenses Depreciation expense $61,000 Other expenses 506,000 567,000 Income before taxes187,000
Income taxes expense 24,000 Net income $163,000 Additional Information on year 2013 Transactions A. Purchased equipment for $41,000 cash B. Issued 11,000 shares of common stock for $5 cash per share C. Declared and paid $96,000 in cash dividends Question: Prepare a complete statement of cash flows; reports inflows and cash outflows from operating activities according to the indirect method. GOLDEN CORPORATION STATEMENT OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2013 Cash flows from operating activities Debit Credit Net income $ Adjustments to reconcile net income to net cash provided by operations: $ Cash flows from investing activities Cash flows from financing activites Net increase(decrease) in cash Cash balance at beginning of year Cash balance at end of yearExplanation / Answer
GOLDEN CORPORATION STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31,2013
Particulars Amount($) Amount($)
Cash flows from Operating Activities
Net profit before taxation and extraordinary items 163000
Income tax 46000
Depeciation 61000
ADD : Decrase in Current assets and Increase in Current liabilities
Accounts payable 8000
LESS : Increase in current Assets and Decrease in Current liabilities
Accounts receivables (13000)
Inventory (87000)
cash generated from operating activities 178000
LESS : Tax paid (37000)
Cash flow from Operating Activities 141000
Cash flow from Investing activities:
Purchase of Equipment (41000)
Net cash flow from Investing activities 100000
Cash flow from Financing activities :
Issue of shares 55000
Dividends paid (96000)
Net cash flow from Fknancing activities 59000
ADD : Cash and Cash Equivalents at Beginning of period 150000
Cash and Cash Equivalents at End of period 209000.
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