Gold Company's comparative balance sheet and income statement for last year appear below: Statement of Financial Position EndingBeginning BalanceBalance Cash...........................................................$ 70,000$ 38,000 Accounts receivable..................................76,00052,000 Inventory....................................................24,00042,000 Prepaid expenses.......................................8,00016,000 Long-term investments..............................260,000210,000 Plant and equipment..................................530,000510,000 Accumulated depreciation.........................( 398,000)( 350,000) Total assets................................................$570,000$518,000 Accounts payable.......................................$ 32,000$ 54,000 Accrued liabilities......................................34,00025,000 Taxes payable............................................4,00011,000 Bonds payable...........................................160,000200,000 Deferred taxes............................................38,00025,000 Common stock...........................................150,000120,000 Retained earnings...................................... 152,000 83,000 Total liabilities and owners’ equity...........$570,000$518,000 Income Statement Sales...........................................................$610,000 Cost of goods sold..................................... 310,000 Gross margin.............................................300,000 Selling and administrative expense........... 190,000 Net operating income................................110,000 Income taxes.............................................. 33,000 Net income.................................................$ 77,000 The company declared and paid $8,000 in cash dividends during the year. Required:Construct in good form the operating activities section of the company's statement of cash flows for the year using the direct method.

Cash flow statement is one of the important financial statements which summarize the cash inflow and…

Answered: Required: Construct in good form the…

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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Question

Gold Company's comparative balance sheet and income statement for last year appear below:

Statement of Financial Position
	Ending	Beginning
	Balance	Balance
Cash...........................................................	$ 70,000	$ 38,000
Accounts receivable..................................	76,000	52,000
Inventory....................................................	24,000	42,000
Prepaid expenses.......................................	8,000	16,000
Long-term investments..............................	260,000	210,000
Plant and equipment..................................	530,000	510,000
Accumulated depreciation.........................	( 398,000)	( 350,000)
Total assets................................................	$570,000	$518,000

Accounts payable.......................................	$ 32,000	$ 54,000
Accrued liabilities......................................	34,000	25,000
Taxes payable............................................	4,000	11,000
Bonds payable...........................................	160,000	200,000
Deferred taxes............................................	38,000	25,000
Common stock...........................................	150,000	120,000
Retained earnings......................................	152,000	83,000
Total liabilities and owners’ equity...........	$570,000	$518,000

	Income Statement
	Sales...........................................................	$610,000
	Cost of goods sold.....................................	310,000
	Gross margin.............................................	300,000
	Selling and administrative expense...........	190,000
	Net operating income................................	110,000
	Income taxes..............................................	33,000
	Net income.................................................	$ 77,000

The company declared and paid $8,000 in cash dividends during the year.

Required:

Construct in good form the operating activities section of the company's statement of cash flows for the year using the direct method.

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Required: Construct in good form the operating activities section of the company's statement of cash flows for the year using the direct method.