Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed below.) 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 $ 168,000 $ 111,400 89,000 75,000 607,000 530,000 864,000 716,400 345,700 303,000 (160,000) (106,000). $1,049,700 $ 913,400 Assets Cash Accounts receivable Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Income taxes payable Total current liabilities Equity Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings Total liabilities and equity $ 95,000 $ 75,000 32,000 27,100 127,000 102,100 600,000 572,000 200,000 166,000 122,700 73, 300 $1,049, 700 $ 913,400

Explanation / Answer

GOLDEN CORPORATION Cash Flow Statement For the year ended December 31, 2017 Cash flows from operating activities Net Income $ 142,400 Adjustment to reconcile net income to: Depreciation expense $   54,000 Increase in accounts receivable $ (14,000) Increase in inventory $ (77,000) Increase in accounts payable $   20,000 Increase in income tax payable $      4,900 $ (12,100) Net cash provided by operating activities $ 130,300 Cash flows from investing activities Purchase of equipment $ (42,700) Net cash used by investing activities $ (42,700) Cash flows from financing activities Proceeds from issue of stock $   62,000 Dividend paid $ (93,000) Net cash used by financing activities $ (31,000) Net increase in cash and cash equivalents $    56,600 Cash and cash equivalents at beginning of period $ 111,400 Cash and cash equivalents at end of period $ 168,000

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