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Golden Corporation's current year income statement, comparative balance sheets, and additional information follow. 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, and (5) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. Assets Cash Accounts receivable Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Income taxes payable Total current liabilities GOLDEN CORPORATION Comparative Balance Sheets December 31 Equity Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings Total liabilities and equity GOLDEN CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Income before taxes Income taxes expense Net income $ 1,807,000 1,089,000 718,000 497,000 54,000 167,000 26, 200 $ 140,800 Additional Information on Current Year Transactions a. Purchased equipment for $41,000 cash. b. Issued 12,300 shares of common stock for $5 cash per share. c. Declared and paid $92,000 in cash dividends. Current Year $ 167,000 87,500 605,500 860,000 343,000 (159,500) $ 1,043,500 $ 93,000 31,000 124,000 595,600 201,400 122,500 $ 1,043,500 Prior Year $ 110,300 74,000 529,000 713,300 302,000 (105,500) $ 909,800 $ 74,000 26,600 100,600 571,000 164,500 73,700 $ 909,800

Golden Corporation's current year income statement, comparative balance sheets, and additional information follow. 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, and (5) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. Assets Cash Accounts receivable Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Income taxes payable Total current liabilities GOLDEN CORPORATION Comparative Balance Sheets December 31 Equity Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings Total liabilities and equity GOLDEN CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Income before taxes Income taxes expense Net income $ 1,807,000 1,089,000 718,000 497,000 54,000 167,000 26, 200 $ 140,800 Additional Information on Current Year Transactions a. Purchased equipment for $41,000 cash. b. Issued 12,300 shares of common stock for $5 cash per share. c. Declared and paid $92,000 in cash dividends. Current Year $ 167,000 87,500 605,500 860,000 343,000 (159,500) $ 1,043,500 $ 93,000 31,000 124,000 595,600 201,400 122,500 $ 1,043,500 Prior Year $ 110,300 74,000 529,000 713,300 302,000 (105,500) $ 909,800 $ 74,000 26,600 100,600 571,000 164,500 73,700 $ 909,800

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Golden Corporation's current year income statement, comparative balance sheets, and additional information follow. 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, and (5) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. Assets Cash Accounts receivable Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Income taxes payable Total current liabilities GOLDEN CORPORATION Comparative Balance Sheets December 31 Equity Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings Total liabilities and equity GOLDEN CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Income before taxes. Income taxes expense Net income $ 1,807,000 1,089,000 718,000 497,000 54,000 167,000 26, 200 $ 140,800 Additional Information on Current Year Transactions a. Purchased equipment for $41,000 cash. b. Issued 12,300 shares of common stock for $5 cash per share. c. Declared and paid $92,000 in cash dividends. Current Year $ 167,000 87,500 605,500 860,000 343,000 (159,500) $ 1,043,500 $ 93,000 31,000 124,000 595,600 201,400 122,500 $ 1,043,500 Prior Year $ 110,300 74,000 529,000 713,300 302,000 (105,500) $ 909,800 $ 74,000 26,600 100,600 571,000 164,500 73,700 $ 909,800
Transcribed Image Text:Golden Corporation's current year income statement, comparative balance sheets, and additional information follow. 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, and (5) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. Assets Cash Accounts receivable Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Income taxes payable Total current liabilities GOLDEN CORPORATION Comparative Balance Sheets December 31 Equity Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings Total liabilities and equity GOLDEN CORPORATION Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) Depreciation expense Income before taxes. Income taxes expense Net income $ 1,807,000 1,089,000 718,000 497,000 54,000 167,000 26, 200 $ 140,800 Additional Information on Current Year Transactions a. Purchased equipment for $41,000 cash. b. Issued 12,300 shares of common stock for $5 cash per share. c. Declared and paid $92,000 in cash dividends. Current Year $ 167,000 87,500 605,500 860,000 343,000 (159,500) $ 1,043,500 $ 93,000 31,000 124,000 595,600 201,400 122,500 $ 1,043,500 Prior Year $ 110,300 74,000 529,000 713,300 302,000 (105,500) $ 909,800 $ 74,000 26,600 100,600 571,000 164,500 73,700 $ 909,800
Required: Prepare a complete statement of cash flows using the indirect method for the current year. Note: Amounts to be deducted should be indicated with a minus sign. Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash GOLDEN CORPORATION Statement of Cash Flows For Current Year Ended December 31 Changes in current assets and current liabilities Cash flows from investing activities Cash flows from financing activities: Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ $ CHA 0 0 0 0 0
Transcribed Image Text:Required: Prepare a complete statement of cash flows using the indirect method for the current year. Note: Amounts to be deducted should be indicated with a minus sign. Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash GOLDEN CORPORATION Statement of Cash Flows For Current Year Ended December 31 Changes in current assets and current liabilities Cash flows from investing activities Cash flows from financing activities: Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year $ $ CHA 0 0 0 0 0
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