Required information Use the following information for the Problems below. [The

Question

Required information

Use the following information for the Problems below.

[The following information applies to the questions displayed below.]

Golden Corp., a merchandiser, recently completed its 2017 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.

  

Problem 12-6A Indirect: Statement of cash flows LO P1, P2, P3

Additional Information on Year 2017 Transactions

Purchased equipment for $54,600 cash.

Issued 13,100 shares of common stock for $5 cash per share.

Declared and paid $100,000 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.)
  

GOLDEN CORPORATION
Comparative Balance Sheets
December 31, 2017 and 2016 2017 2016 Assets Cash $ 175,000 $ 119,100 Accounts receivable 99,500 82,000 Inventory 617,500 537,000 Total current assets 892,000 738,100 Equipment 364,600 310,000 Accum. depreciation—Equipment (163,500 ) (109,500 ) Total assets $ 1,093,100 $ 938,600 Liabilities and Equity Accounts payable $ 109,000 $ 82,000 Income taxes payable 39,000 30,600 Total current liabilities 148,000 112,600 Equity Common stock, $2 par value 614,000 579,000 Paid-in capital in excess of par value, common stock 207,000 176,500 Retained earnings 124,100 70,500 Total liabilities and equity $ 1,093,100 $ 938,600

Explanation / Answer

GOLDEN CORPORATION Statement of Cash Flows For Year Ended December 31, 2017 Cash flows from operating activities Net Income 153600 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense 54000 Increase account receivable -17500 Increase inventory -80500 Increase account payable 27000 Increase income tax payable 8400 -8600 Net Cash flow from operating activities $145000 Cash flows from investing activities: Purchase equipment -54600 Net Cash flow from investing activities -54600 Cash flows from financing activities: Issue common stock 65500 Dividend paid -100000 Net Cash flow from financing actvities -34500 Net increase (decrease) in cash $55900 Cash balance at beginning of year 119100 Cash balance at end of year $175000

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