Golden Corp., a merchandiser, recently completed its 2017 operations. For the ye

Question

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. GOLDEN CORPORATION Comparative Balance Sheets December 31, 2017 and 2016 2017 2016 Assets Cash Accounts receivable. Inventory otal current assets... Equipment Accum. depreciation-Equipment Total assets 164,000$107.000 83,00071.000 601000526.000 848.000704.000 335,000 299.000 58000 104.000 $1,025,000 $899,000 Llabilities and Equity Accounts payable es payable current liabilities $ 87,000$71.000 28.00025,000 115.00096,000

Explanation / Answer

GOLDEN CORPORATION Cash Flow Statement For the year ended December 31, 2017 Cash flows from operating activities Net Income $ 136,000 Adjustment to reconcile net income to: Depreciation expense $   54,000 Increase in accounts receivable $ (12,000) Increase in inventory $ (75,000) Increase in accounts payable $   16,000 Increase in income tax payable $      3,000 $ (14,000) Net cash provided by operating activities $ 122,000 Cash flows from investing activities Purchase of equipment $ (36,000) Net cash used by investing activities $ (36,000) Cash flows from financing activities Proceeds from issue of stock (12,000*$5) $   60,000 Dividend paid $ (89,000) Net cash used by financing activities $ (29,000) Net increase in cash and cash equivalents $    57,000 Cash and cash equivalents at beginning of period $ 107,000 Cash and cash equivalents at end of period $ 164,000

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