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Golden Corp., a merchandiser, recently completed its 2017 operations. 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. The company’s balance sheets and income statement follow.
GOLDEN CORPORATION
Comparative Balance Sheets
December 31, 2017 and 2016
2017 2016
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 Accum. 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 606,000 575,000 Paid-in capital in excess of par value, common stock 203,000 170,500 Retained earnings 123,300 72,100 Total liabilities and equity $ 1,068,300 $ 924,200 GOLDEN CORPORATION
Income Statement
For Year Ended December 31, 2017
Sales $ 1,827,000
Cost of goods sold 1,093,000
Gross profit 734,000
Operating expenses Depreciation expense $ 54,000 Other expenses 501,000 555,000
Income before taxes 179,000
Income taxes expense 31,800
Net income $ 147,200
Additional Information on Year 2017 Transactions
1. Purchased equipment for $47,800 cash.
2. Issued 12,700 shares of common stock for $5 cash per share.
3. Declared and paid $96,000 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. (Amounts to be deducted should be indicated with a minus sign.)
Additional Information on Year 2017 Transactions
1. Net income was $147,200.
2. Accounts receivable increased.
3. Inventory increased.
4. Accounts payable increased.
5. Income taxes payable increased.
6. Depreciation expense was $54,000.
7. Purchased equipment for $47,800 cash.
8. Issued 12,700 shares at $5 cash per share.
9. Declared and paid $96,000 of cash dividends.