Golden Corp., a merchandiser, recently completed its 2015 operations. For the ye

Question

Golden Corp., a merchandiser, recently completed its 2015 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, 2015 and 2014 2015 2014 Assets Cash Accounts receivable Inventory $ 229,000 $ 159,000 79,000 631,000 541,000 95,000 Total current assets Equipment Accum. depreciation-Equipment 955.000 779,000 373,000 329.000 (183,000) (119,000) Total assets $1,145,000 $ 989,000 Liabilities and Equity Accounts payable Income taxes payable $ 97,000 $ 86,000 40,000 46,000 Total current liabilities Equity Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings 143,000 126,000 626.000 598,000 217,000 175,000 90,000 159,000 Total liabilities and equity $1,145,000 $ 989,000 GOLDEN CORPORATION Income Statement For Year Ended December 31, 2015 Sales Cost of goods sold $ 1,867,000 1,101,000 Gross profit Operating expenses 766,000 $ 64,000 509,000 Depreciation expense Other expenses 573,000 Income before taxes Income taxes expense 193,000 25,000 Net income S 168,000

Explanation / Answer

CASH FLOW FROM OPERATING ACTIVITIES $ Net Income 1,68,000 Add: Depreciation 64,000 Add: Increase in Current Liabilities       Accounts Payable 11,000       Income tax payable 6,000 Less: Increase in Current Assets      Accounts receivables (Net) -16,000      Inventory -90,000 NET CASH FLOW FROM OPERATING ACTIVITIES (1) 1,43,000 CASH FLOW FROM INVESTING ACTIVITIES $ Acquisition of Equipment -44,000 NET CASH FLOW FROM INVESTING ACTIVITIES (2) -44,000 CASH FLOW FROM FINANCING ACTIVITIES $ Dividend Paid -99,000 Increase in Common Stock 70,000 NET CASH FLOW FROM FINANCING ACTIVITIES (3) -29,000 NET CASH INFLOW/(OUTFLOW) DURING YEAR (1) + (2) + (3) 70,000 Beginning Cash Balance (2014) 1,59,000 Ending Cash balance (2015) 2,29,000 NET CASH INFLOW/(OUTFLOW) DURING YEAR 70,000

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