Golden Corp., a merchandiser, recently completed its 2013 operations. For the ye

Question

Golden Corp., a merchandiser, recently completed its 2013 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, 2013 and 2012 2013 2012 Assets Cash Accounts receivable Merchandise inventory Equipment Accum. depreciation-Equipment $ 175,000 $ 118,000 73,900 722,600 539,900 338,500 301,900 (155,100) (101,100) 78,000 Total assets $1,159,000 $ 932,600 Liabilities and Equity Accounts payable Income taxes payable Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings $ 89,900 $ 73,900 27,900 615,700 570,900 174,100 162,900 97,000 97,000 182,300 Total liabilities and equity $1,159,000 $ 932,600 GOLDEN CORPORATION Income Statement For Year Ended December 31, 2013 Sales Cost of goods sold $ 2,332,000 1,414,500 917,500 Gross profit Operating expenses $144,000 584,000 Depreciation expense Other expenses 728,000 Income before taxes Income taxes expense 189,500 20,200 Net income $ 169,300

Explanation / Answer

Statement of cash flow cash flow from operating activity Net Income 169300 Adjustment to reconcile net income to cash provided to operations Depreciation expense [155100-101100] 54000 Increase in accounts receivable [78000-73900] -4100 Increase in inventory [722600-539900] -182700 Increase in accounts payable [89900-73900] 16000 Increase in income tax payable [97000-27900] 69100 -47700 Net cash provided by operating activity 121600 cash flow from investing activity Purchase of equipment -36600 Net cash used by investing activity -36600 cash flow from financing activity issue of common stock [11200*5] 56000 dividend paid -84000 Net cash used by financing activity -28000 Net increase (decrease) in cash [121600-28000-36600] 57000 Cash at beginning 118000 cash at end 175000

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