Golden Cop, a merchandser, recently completed its 2015 operations. For the year

Question

Golden Cop, a merchandser, recently completed its 2015 operations. For the year (1) sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers (3) all purchases of inventory are on credi. (4) all debts to Accounts Payable reflect cash payments for inventory, 05) 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 staternent follow GOLDEN CORPORATION Comparative Balance Sheets December 31, 2015 and 2014 2015 2014 Assets Cash Accounts receirable 185.000 $132.000 90.000 70, 613,000 532,000 Total current asset:s Equipment Accum depreciation-Equipment 888,000 734,000 46,000 311,000 (165,000) (110,000) Total assets $1,069,000 $ 935,000 Liabilities and Equity Accounts payable Income taxes payable $90,000 $ 77,000 40,000 31.000 Total current liablities Equity Common stock, $2 par value Paid-n capital in excess of par value, common stock Retained eamings 30.000 108.000 600,000 580,000 96,000 166,000 43.000 81.000 Tolal liabilities and equity $1,069,000 $ 935,000 GOLDEN CORPORATION Income Statement For Year Ended December 31, 2015 $ 1,822,000 1,092,000 Cost of goods sold 730,000 Gross proft Operating expenses $ 55,000 500,000 Depreciation expense Other expensos 555,000 Income before taxes Income taxes expense 175,000 23,000 Not income $ 152.000 Additional Information on Year 2015 Transactions a. Purchased equipment for $35,000 cash b. Issued 10,000 shares of common stock for $5 cash per share. c. Declared and paid $90,000 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

Statement of cash flow :

Cash flow from operating activities Net income 152000 Adjustment to reconcile net income Depreciation expenses 55000 Increase account receivable (20000) Increase inventory (81000) Increase account payable 13000 Increase income tax payable 9000 Net cash flow from operating activities 128000 Cash flow from investing activities Purchase equipment (35000) Net Cash flow from investing activities (35000) Cash flow from Financing activities Common stock issued 50000 Dividend paid (90000) Net Cash flow from Financing activities (40000) Net cash flow 53000 Beginning cash 132000 Ending cash 185000

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