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, all sales are credit sales, all credits to Accounts Receivable reflect cash receipts from customers. all purchases of inventory are on credit. all debits to Accounts Payable reflect cash payments for inventory, Other Expenses are all cash expenses, and 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 2015 Transactions Purchased equipment for $47,000 cash. Issued 12,000 shares of common stock for $5 cash per share. Declared and paid $102,000 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. (Amounts to be deducted should be indicated with a minus sign.)

Explanation / Answer

Solution:

Statement of Cash Flows For the Year Ended December 31, 2015 Cashflow from operating activities Net Income 173,000 Adjustments to reconcile net income to net cash provided by operations Add: Depreciation expense 67,000 Less: Increase in accounts receivables -19000 Less: Increase in inventory -93000 Add: Increase in accounts payable 14000 Add: Increase in income tax 9,000 Cashflow from operating activities 151,000 Cash flow from investing activities Purchase of equipment -47,000 Cash flow from investing activities -47,000 Cash flow from financing activities Dividends paid -102,000 Issue of common stock 60,000 Cash flow from financing activities - 42,000 Net increase (decrease) in cash 62,000 Cash balance at beginning of year 168,000 Cash balance at end of year 230,000

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.