Statement of cash flows
Problem 16-4A Indirect: Statement of cash flows LO P1, P2, P3
Golden Corp., a merchandiser, recently completed its 2013 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, 2013 and 2012
2013 2012
Assets
Cash $ 194,000 $ 135,000
Accounts receivable 92,000 71,000
Merchandise inventory 615,000 533,000
Equipment 349,000 313,000
Accum. depreciation—Equipment (167,000 ) (111,000 )
Total assets $ 1,083,000 $ 941,000
Liabilities and Equity
Accounts payable $ 92,000 $ 78,000
Income taxes payable 42,000 32,000
Common stock, $2 par value 604,000 582,000
Paid-in capital in excess of par value, common stock 200,000 167,000
Retained earnings 145,000 82,000
Total liabilities and equity $ 1,083,000 $ 941,000
GOLDEN CORPORATION
Income Statement
For Year Ended December 31, 2013
Sales $ 1,827,000
Cost of goods sold 1,093,000
Gross profit 734,000
Operating expenses
Depreciation expense $ 56,000
Other expenses 501,000 557,000
Income before taxes 177,000
Income taxes expense 23,000
Net income $ 154,000
Additional Information on Year 2013 Transactions
a.
Purchased equipment for $36,000 cash.
b.
Issued 11,000 shares of common stock for $5 cash per share.
c.
Declared and paid $91,000 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.)
