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 $ 194,000 $135,000 92,000 71,000 615,000 533,000 Total current assets 901,000 739,000 349,000 313,000 (167.000) (111,000) Total assets $1,083,000 $941,000 Liabilities and Equity Accounts payable Income taxes payable $ 92,000 S 78,000 42,000 32,000 Total current liabilities Equity Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings 34,000 110,000 604,000 582,000 200,000 167.000 145,000 82,000 Total liabilities and equity $1,083,000 $941,000 GOLDEN CORPORATION Income Statement For Year Ended December 31, 2015 Sales Cost of goods sold $ 1,827,000 1,093,000 Gross profit Operating expenses 734,000 $ 56,000 501,000 Depreciation expense Other expenses 557,000 Income before taxes Income taxes expense 177,000 23,000 Net income 154,000 Additional Information on Year 2015 Transactions a. Purchased equipment for $36,000 cash. b. Issued 11,000 shares of common stock for $5 cash per share. c. Declared and paid $91,000 in cash dividends.

Explanation / Answer

GOLDEN CORPORATION Statement of cash flows For the year ended December 31,2015 Cash flow from operating activities Net Income $       154,000 Adjustments to reconcile net income to net cash provided by operations: Add: Depreciation $         56,000 Less: Increase in A/R $       -21,000 Less: Increase in Inventory $       -82,000 Add: Increase in A/P $         14,000 Add: Increase in Income tax Payable $         10,000 $       131,000 cash flow from investing activities Equipment purchase $       -36,000 $       -36,000 Cash flow fromfinancing activities Issue of common stock $         55,000 Payment of dividend $       -91,000 $       -36,000 Net Increase(Decrease) in cash $         59,000 Cash balance at beginning of year $       135,000 Cash balance at end of year $       194,000

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