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 $ 239,000 $ 171,000 83,000 639,000 545,000 103,000 Total current assets Equipment Accum. depreciation 981,000 799,000 385,000 337,000 (191,000) (123,000) Equipment Total assets $1,175,000 $1,013,000 Liabilities and Equity Accounts payable Income taxes payable $ 105,000 $ 90,000 44,000 159,000 134,000 632,000 606,000 218,000 179,000 94,000 $1,175,000 $1,013,000 54,000 Total current liabilities Equity Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings 166,000 Total liabilities and equity

Explanation / Answer

Cash Flow Statement from Indirect Method Particular Amount Amount Cash Flow from Operating Activities Net Income 175000 Add Depreciation 68000 Less: Increase in Account Receivable -20000 Add: Increase in account payable 15000 Add: Income TaxPayable 10000 Less: Increase in Inventory -94000 Cash Flow from Operating Activities 154000 Cash Flow from Investing activities Purchase of Equipment -48000 Cash Flow from Investing activities -48000 Cash Flow from financing activities Proceed from issue of common Stock 65000 Less: Dividend paid -103000 Cash Flow from financing activities -38000 Net Cash 68000 Add: Cash balance in the beginning 171000 Cash Balance on closing 239000

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