Golden Corp., a merchandiser, recently completed its 2017 operations. For the year, (1) all sales are credit sales, (2) all cred

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2 years ago

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Golden Corp., a merchandiser, recently completed its 2017 operations. For the year, (1) all sales are credit sales, (2) all cred

its 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
Assets 2017 2016
Cash $183,000 $127,900
Accounts receivable 111,500 90,000
Inventory 629,500 545,000
Total current assets 924,000 762,900
Equipment 386,200 318,000
Accum. Depreciation-Equipment (167,500) (113,500)
Total assets $1,142,700 $967,400
Liabilities and Equity
Accounts Payable $125,000 $90,000
Income taxes payable 47,000 34,600
Total current liabilities 172,000 124,600
Equity
Common stock, $2 par value 630,000 587,000
Paid-in capital in excess of par value, common stock 215,000 188,500
Retained earnings 125,700 67,300
Total liabilities and equity $1,142,700 $967,400

GOLDEN CORPORATION
Income Statement
For Year Ended December 31, 2017
Sales $1,887,000
Cost of goods sold 1,105,000
Gross profit 782,000
Operating expenses
Depreciation expense $54,000
Other expenses 513,000 567,000
Income before taxes 215,000
Income taxes expense 48,600
Net income $166,400
Additional information on Year 2017 Transactions

a. Purchased equipment for $68,200 cash.

b. Issued 13,900 shares of common stock for $5 cash per share.

c. Declared and paid $108,000 in cash dividends.

Required:

Prepare a complete statement of cash flows: report its cash inflows and cash outflows from operating activities according to the indirect method.

Business