Using INDIRECT METHOD

COLON CORPORATION Comparative Balance Sheets December 31 Current Year Prior Year $ 179,000 105,500 623,500 908,000 375,400 (165,500) $ 1,117,900 $ 123,500 86,000 541,000 750,500 314,000 (111,500) $ 953,000 Assets Canh Accounts receivable Inventory Total current annet Equipment Accumulated depreciation-Equipment Total assets 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 $ 117,000 43,000 160,000 $ 86,000 32,600 118,600 610,000 223,000 124,900 $1,117,900 583.000 182,500 68,900 $ 953,000 GOLDEN CORPORATION Income Statement For Curront Year Ended December 31 Sales Coat of goods sold Grons profit Operating expenses (excluding depreciation) Depreciation expenso Income before taxes Income taxes exponde Nat income $ 1,867,000 1.101.000 766,000 509,000 54,000 203,000 43,000 160,000 Additional Information on Current Year Transactions a. Purchased equipment for $61,400 cash. b. Issued 13,500 shares of common stock for $5 cash per share. c. Declared and paid $104,000 in cash dividends, 160,000 For Current Year Ended December 31 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Depreciation expense Changes in current assets and current liabilities Increase in accounts receivable Increase in inventory Increase in accounts payable Increase in taxes payable 54,000 (19,500) (82,500) 3,100 10,400 S 125,500 Net cash provided by operating activities Cash flows from investing activities Cash paid for equipment (61,400) (61,400) Cash flows from financing activities: Cash received from stock issuance Cash paid for cash dividends 67,500 104.000) (36,500) 27,600 S Net increase (decrease) in cash Cash balance at December 31, prior year Cash balance at December 31, current year S 27,600