Question

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.

General Journal tab - Reconstruct the entries to summarize the activity between December 31, prior year and December 31, current year.

Direct Method tab - Prepare the Statement of Cash flows for the year ended December 31, current year using the direct method.

Indirect Method tab - Prepare the reconciliation to the indirect method.

Using the income statement, the comparative balance sheet, and the additional information given above, reconstruct the entries for the summarized activity of the current fiscal year. Upon completion, the trial balance tab should agree with the December 31, current year balances.

Additional Information on Current Year Transactions

a. Purchased equipment for $36,000 cash.

b. Issued 12,000 shares of common stock for $5 cash per share.

c. Declared and paid $89,000 in cash dividends.

Answer 1

Golden Company 136000 Statement of Cashflow - Indirect Method For theperiod ending 31.12.2019 Cashflow from Operating Activity Net Income Adjustments: Depeciation Increase in Accounts Receivable Increase in Inventory Increase in Accounts Payable Increase in Income Taxes Payable Cash generated from Operating Activity Statement of Cashflow - Direct Method For theperiod ending 31.12.2019 Cashflow from Operating Activity Collection from Customer (1792000+71000-83000) Payments to suppliers (1086000+71000-87000+601000-526000) Taxes paid (22000+25000-28000) Other Expenses paid 1780000 -1145000 - 19000 -494000 54000 - 12000 - 75000 16000 3000 122000 Cashflow from Investing Activity Equipment purchased Cash used for Investing Activity - 14000 122000 -36000 -36000 Cashflow from Investing Activity Equipment purchased Cash used for Investing Activity -36000 -36000 24000 36000 -89000 Cashflow from Financing Activity Common Stock issued Paid in Capital in excess of par Dividends paid Cash used for Financing Activity Net Increase in Cash Beginning Cash Balance Ending Cash Balance 24000 36000 -89000 -29000 57000 107000 164000 Cashflow from Financing Activity Common Stock issued Paid in Capital in excess of par Dividends paid Cash used for Financing Activity Net Increase in Cash Beginning Cash Balance Ending Cash Balance -29000 57000 107000 164000