Answer:
Golden Corp.
Statement of Cash Flows for the year ended December 31, using the indirect method:
Net Income before taxes $167,000
Add non-cash expenses:
Depreciation 54,000
Adjustment of current assets:
Accounts receivable (13,500)
Inventory (76,500)
Adjustment of current liabilities:
Accounts payable 19,000
Income taxes payable (4,400)
Net Cash Flow from operations $145,600
Financing Activities:
Common Stock $61,500
Dividend paid 92,000
Net Cash Flow from financing activities $153,500
Investing Activities:
Equipment purchase $41,000
Net Cash Flow from investing activities $41,000
Net Cash Flow $340,100
Explanation:
The Golden Corp.'s statement of cash flows depicts the flow of cash under three main activity headings: operating, financing, and investing. There are two methods under which Golden Corp. can prepare the statement. They include the indirect method, which starts from the net income, adjusts the non-cash expenses and the changes in working capital, and the direct method, which shows the cash inflows and outflows for each cash flow item.
