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 $93,50078,000$

Inventory $611,500533,000$

Total current assets $876,000725,700$

Equipment $353,800306,000$

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 $35,00028,600$

Total current liabilities $136,000106,600$

Equity

Common stock, $$2$ par value $600,400575,000$

Paid$-$in capital in excess of par value, common stock $208,600170,500$

Retained earnings $123,30072,100$

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.

Required:

Prepare a complete statement of cash flows using a spreadsheet under the indirect method.

Note: Enter all amounts as positive values.

Answer rating: 100% (QA)

To prepare a complete statement of cash flows using the indirect method we need to analyze the chang... View the full answer