Answered: Golden Corporation's current year…

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

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.

GOLDEN CORPORATION
Comparative Balance Sheets
December 31
	Current Year	Prior Year
Assets
Cash	$ 171,000	$ 114,700
Accounts receivable	93,500	78,000
Inventory	611,500	533,000
Total current assets	876,000	725,700
Equipment	353,800	306,000
Accumulated depreciation—Equipment	(161,500)	(107,500)
Total assets	$ 1,068,300	$ 924,200
Liabilities and Equity
Accounts payable	$ 101,000	$ 78,000
Income taxes payable	35,000	28,600
Total current liabilities	136,000	106,600
Equity
Common stock, $2 par value	600,400	575,000
Paid-in capital in excess of par value, common stock	208,600	170,500
Retained earnings	123,300	72,100
Total liabilities and equity	$ 1,068,300	$ 924,200

GOLDEN CORPORATION
Income Statement
For Current Year Ended December 31
Sales	$ 1,827,000
Cost of goods sold	1,093,000
Gross profit	734,000
Operating expenses (excluding depreciation)	501,000
Depreciation expense	54,000
Income before taxes	179,000
Income taxes expense	31,800
Net income	$ 147,200

Additional Information on Current Year Transactions

Purchased equipment for $47,800 cash.
Issued 12,700 shares of common stock for $5 cash per share.
Declared and paid $96,000 in cash dividends.

Problem 12-8AB (Algo) Direct: Statement of cash flows LO P5

Required:

Prepare a complete statement of cash flows using the direct method for the current year.

Note: Amounts to be deducted should be indicated with a minus sign.

Use the following information for the Problems below. (Algo)
[The following Information applies to the questions displayed below.]
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
Equity
Common stock, $2 par value
GOLDEN CORPORATION
Comparative Balance Sheets
December 31
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
Additional Information on Current Year Transactions
$ 1,827,000
1,093,000
734,000
501,000
54,000
179,000
31,800
$147,200
a. Purchased equipment for $47,800 cash.
b. Issued 12,700 shares of common stock for $5 cash per share.
c. Declared and paid $96,000 in cash dividends.
Current Year
$ 171,000
93,500
611,500
876,000
353,800
(161,500)
$ 1,068,300
$ 101,000
35,000
136,000
600,400
208,600
123,300
$ 1,068,300
Prior Year
$ 114,700
78,000
533,000
725,700
306,000
(107,500)
$924, 200
$ 78,000
28,600
106,600
575,000
170,500
72,100
$ 924,200
Required:
Prepare a complete statement of cash flows using the direct method for the current year.
Note: Amounts to be deducted should be Indicated with a minus sign.
GOLDEN CORPORATION
Statement of Cash Flows
For Current Year Ended December 31
Cash flows from operating activities
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

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