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.

2015

2014

  

  

Purchased equipment for $48,000 cash.

Issued 13,000 shares of common stock for $5 cash per share.

Declared and paid $103,000 in cash dividends.

  

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 Statement of Cash Flows For Year Ended December 31, 2015 Cash flows from operating activities Net Income Adjustments to reconcile net income to net cash provided by operations 0 Cash flows from investing activities: 0 Cash flows from financing activities 0 Net increase (decrease) in cash Cash balance at beginning of year Cash balance at end of year

Explanation / Answer

net profit $   1,75,000.00 Adjustments to reconcile depreciation $       68,000.00 Increase in accounts payable $       15,000.00 Increase in income tax payable $       10,000.00 Decrease in accounts receivable $     -20,000.00 decrease in inventory $     -94,000.00 Net cash provided by opearting activites $ 1,54,000.00 Purchase of equipment $     -48,000.00 Net cash used in investing activites $   -48,000.00 Issue of common stock (13000 x $5) $       65,000.00 payment of dividend $ -1,03,000.00 Net cash used in financing activites $   -38,000.00 Net cash increase during the year $     68,000.00 Cash balance at the beginning of the year $ 1,71,000.00 Cash balance at the end of the year 2015 $ 2,39,000.00

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