Chapter 12 Problems

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Item 5

Item 5 Part 2 of 2 4 points

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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.

GOLDEN CORPORATION Comparative Balance Sheets December 31
	Current Year						Prior Year
Assets
Cash		$	175,000					$	119,100
Accounts receivable			99,500						82,000
Inventory			617,500						537,000
Total current assets			892,000						738,100
Equipment			364,600						310,000
Accum. depreciationEquipment			(163,500	)					(109,500	)
Total assets		$	1,093,100					$	938,600
Liabilities and Equity
Accounts payable		$	109,000					$	82,000
Income taxes payable			39,000						30,600
Total current liabilities			148,000						112,600
Equity
Common stock, $2 par value			605,200						579,000
Paid-in capital in excess of par value, common stock			215,800						176,500
Retained earnings			124,100						70,500
Total liabilities and equity		$	1,093,100					$	938,600

GOLDEN CORPORATION Income Statement For Current Year Ended December 31
Sales				$	1,847,000
Cost of goods sold					1,097,000
Gross profit					750,000
Operating expenses
Depreciation expense	$	54,000
Other expenses		505,000			559,000
Income before taxes					191,000
Income taxes expense					37,400
Net income				$	153,600

Additional Information on Current Year Transactions

1. Purchased equipment for $54,600 cash.
2. Issued 13,100 shares of common stock for $5 cash per share.
3. Declared and paid $100,000 in cash dividends.

For Current Year Ended December 31 Analysis of Changes December 31, Prior Debit Credit Year December 31, Current Year $ $ 175,000 Balance sheet-debit balance accounts Cash Accounts receivable Inventory Equipment 119,100 82,000 537,000 310,000 1,048, 100 $ Balance sheet-credit balance accounts Accumulated depreciation Equipment Accounts payable Income taxes payable Common stock, $2 par value Paid-in capital in excess of par value, common stock Retained earnings 109,500 82,000 30,600 579,000 176,500 70,500 1,048,100 Statement of cash flows Operating activities nvesting activities Financing activities