newconnect.mheducation.com/flow/connect.html thod of Reporting Operating Cash Fl

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newconnect.mheducation.com/flow/connect.html thod of Reporting Operating Cash Flo.. Saved Golden Corp, a merchandiser, recently completed its 2017 operations. For the year, () 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, 2817 and 2016 2817 2016 Assets Cash Accounts receivable Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Income taxes payable Total current iabilities Equity Common stock, S2 par value Paid-in capital in excess of par value, common stock Retained earnings Total liabilities and equity $ 181,000 125, 700 88,000 188,500 026 508543,080 756,780 916,800 388,800 316,000 166,500) (112, 500) $1,130,300 $ 960, 200 $ 121,000 88,800 33,600 166.008 121,600 45,008 626,000 585,00 213,000 185,500 125,30068,100 $1,130,300 $ 960, 200

Explanation / Answer

Cash flow indirect method Cash flow from operating activities Net income 163200 Adjustments to reconcile the net income Depreciation expense 54000 Gain on sale of investment Changes in current asset and liabilities Increase in prepaid insurance Increase in accounts receivable -20500 Increase in Inventory -83500 Increase in accounts payable 33000 Increase in income tax payable 11400 -5600 Cash flow from operating activities 157600 Cash flow from Investing activities Equipment purchased -64800 Cash flow from Investing activities -64800 Cash flow from Financing activities Common stock 27400 Paid in capital in excess of par 41100 Dividend paid -106000 Cash flow from Financing activities -37500 Net Cash and cash equivalent 55300 Add Beginning cash and cash equivalent 125700 Ending cash and cash equivalent 181000

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