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ration's cur year me statement, comparative information follow. 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) an 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 $ 1,792,000 1,086,000 706,000 494,000 54,000 158,000 22,000 $ 136,000 Additional Information on Current Year Transactions a. Purchased equipment for $36,000 cash. b. Issued 12,000 shares of common stock for $5 cash per share. c. Declared and paid $89,000 in cash dividends. Current Year $ 164,000 83,000 601,000 848,000 335,000 (158,000) $ 1,025,000 $ 87,000 28,000 115,000 592,000 196,000 122,000 $ 1,025,000 Prior Year $ 107,000 71,000 526,000 704,000 299,000 (104,000) $ 899,000 $ 71,000 25,000 96,000 568,000 160,000 75,000 $ 899,000

ration's cur year me statement, comparative information follow. 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) an 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 $ 1,792,000 1,086,000 706,000 494,000 54,000 158,000 22,000 $ 136,000 Additional Information on Current Year Transactions a. Purchased equipment for $36,000 cash. b. Issued 12,000 shares of common stock for $5 cash per share. c. Declared and paid $89,000 in cash dividends. Current Year $ 164,000 83,000 601,000 848,000 335,000 (158,000) $ 1,025,000 $ 87,000 28,000 115,000 592,000 196,000 122,000 $ 1,025,000 Prior Year $ 107,000 71,000 526,000 704,000 299,000 (104,000) $ 899,000 $ 71,000 25,000 96,000 568,000 160,000 75,000 $ 899,000

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 $ 1,792,000 1,086,000 706,000 494,000 54,000 158,000 22,000 $ 136,000 Additional Information on Current Year Transactions a. Purchased equipment for $36,000 cash. b. Issued 12,000 shares of common stock for $5 cash per share. c. Declared and paid $89,000 in cash dividends. Current Year $ 164,000 83,000 601,000 848,000 335,000 (158,000) $ 1,025,000 $ 87,000 28,000 115,000 592,000 196,000 122,000 $ 1,025,000 Prior Year $ 107,000 71,000 526,000 704,000 299,000 (104,000) 899,000 $ 71,000 25,000 96,000 568,000 160,000 75,000 $ 899,000
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 $ 1,792,000 1,086,000 706,000 494,000 54,000 158,000 22,000 $ 136,000 Additional Information on Current Year Transactions a. Purchased equipment for $36,000 cash. b. Issued 12,000 shares of common stock for $5 cash per share. c. Declared and paid $89,000 in cash dividends. Current Year $ 164,000 83,000 601,000 848,000 335,000 (158,000) $ 1,025,000 $ 87,000 28,000 115,000 592,000 196,000 122,000 $ 1,025,000 Prior Year $ 107,000 71,000 526,000 704,000 299,000 (104,000) 899,000 $ 71,000 25,000 96,000 568,000 160,000 75,000 $ 899,000
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
Transcribed Image Text: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
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