Golden Corp., a merchandiser, recently completed its 2013 operations For the yea

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 Additional Information on Year 2013 Transactions a. Purchased equipment tor $35.000 cash. b Issued 10.000 shares of common stock for $5 cash per share c. Declared and paid $90,000 in cash dividends Required: Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method.

Explanation / Answer

Particulars Detail Amount Cash Flow from operating activities Net Profit 152000 Provision for income tax 23000 Depreciation 55000 Cash Flow before adjusting working capital adjustments 230000 Increase in accounts receivables -20000 Increase in Inventory -81000 increase in accounts payable 13000 Cash Flows after adjusting working capital adjustments 142000 Income tax paid -14000 128000 Cash Flow from investing activities Purchase of equipment -35000 Cash flow from financing activities Issue of common stock 50000 Payment of dividend -90000 -40000 Net increase in cash during the year 53000 Add: Opening cash balance 132000 Closing cash balance 185000

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