[The following information applies to the questions displayed below.] Golden Corp.'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. (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. Assets Cash Accounts receivable Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Income taxes payable Total current liabiliti GOLDEN CORPORATION Comparative Balance Sheets December 31 Current Year $ 180,000 107,000 625,000 912,000 378,100 (166,000) $1,124,100 $ 119,000 44,000 Prior Year $ 124,600 87,000 542,000 753,600 315,000 (112,000) 956,600 87,000 33,100
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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![[The following information applies to the questions displayed below.]
Golden Corp'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. (5) Other
Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of
taxes.
ences
Assets
Cash
Accounts receivable
Inventory
Total current assets
Equipment
Accum. depreciation-Equipment
Total asse
Liabilities and Equity
Accounts payable
Income taxes payable
Total current liabilities
Equity
Common stock, $2 par value
Paid-in capital in excess of par value, common stock
Retained earnings
Total liabilities and equity
Show Transcribed Text
necasueu entitangs
Total liabilities and equity
GOLDEN CORPORATION
Comparative Balance Sheets
December 31
GOLDEN CORPORATION
Income Statement
For Current Year Ended December 31
Sales
Cost of goods sold i
Gross profit
erating expenses
Depreciation expense
Other expenses
Incone before taxes
Income taxes expense
Net income
$ 54,000
510,000
$1,872,000
1,102,000
770,000
564,000
206,000
44,400
$ 161,600
Additional Information on Current Year Transactions
a. Purchased equipment for $63,100 cash.
b. Issued 13,600 shares of common stock for $5 cash per share.
c. Declared and paid $105,000 in cash dividends.
Current Year
$ 180,000
107,000
625,000
912,000
378,100
(166,000)
$1,124,100
$ 119,000
44,000
163,000
611,200
224,800
125,100
$1,124,100
I
Prior Year
$ 124,600
87,000
542,000
753,600
315,000
(112,000)
$.956,600
$ 87,000
33,100
120, 100
584,000
184,000
68,500
$ 956,600
AN, AU
$1,124,100
$956,600
Required:
Prepare a complete statement of cash flows using the direct method for the current year. (Amounts to be deducted should be
indicated with a minus sign.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F22da4f3b-2612-43b0-ae2f-5b16aef8bb60%2F2748f8f5-ab1f-40be-bd46-7c1a60fa1cda%2Fo2qhjay_processed.jpeg&w=3840&q=75)
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