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 Recelvable reflect cash recelpts from customers, (3) all purchases of Inventory are on credit, (4) all deblts 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 Total current assets Equipment Accum depreciation-Equipment Total assets 167,000 110,300 74,000 529,000 713, 300 302,000 (159, 500) 105, 500) $1,043, 500 909, 800 87, 500 605, 500 860,000 343,000 Liabilities and Eqquity Accounts payable Income taxes payable Total current liabilities Equity Common stock, $2 par value Paid-in capital in excess of par value, cormon stock Retained earnings Total liabilities and equity $ 93,000 $74,000 26, 600 100, 600 31,000 124, 000 571,000 164, 500 73, 700 $1,043, 500 909, 800 598,000 199,000 122,500 GOLDEN CORPORATION Income Statement For Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses $1,807,000 1,089, 000 718, 000 54,000 497,000 Depreciation expense Other expenses Income before taxes Income taxes expense Net income 551,000 167, 000 26, 200 140,800 $ Additlonal Informatlon on Year 2017 Transactlons a. Purchased equlpment for $41,000 cash. b. Issued 12,300 shares of common stock for $5 cash per share c. Declared and pald $92,000 In cash dividends. Requirec 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 wlth a mlnus sign.)

Explanation / Answer

Answer:-

Golden Corporation Statement of Cash Flow (Using Indirect Method) For the year ended December 31,2017 Particulars Amount $ $ Cash flow from opreating activities Net Income 140800 Adjustments to reconcile net income to net cash provided by opreating activities Adjustment for non cash effects Depreciation 54000 Change in opreating assets & liabilities Increase in Accounts Receiviable 87500-74000 -13500 Increase in Inventory 605500-529000 -76500 Increase in Accounts payable 93000-74000 19000 Increase in Accounts payable 31000-26600 4400 Net cash flow from opreating activities (a) 128200 Cash Flow from Financing activities Issue common stock 12300 shares*$5 cash per share 61500 Cash dividends paid -92000 Net cash Flow from Financing activities (b) -30500 Cash Flow from Investing activities Equipment purchased -41000 Net cash Flow from Investing activities (c) -41000 Net Channge in cash c=a+b+c 56700 Beginning cash balance 110300 Closing cash balance 167000

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