ACC- Golden Corporation Solution

$13.00

Description






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



$



163,000





$



133,000



Accounts
receivable





83,000







72,000



Merchandise
inventory





600,000







515,000



Equipment





350,000







215,000



Accum.
depreciation—Equipment





(157,000)







(100,000)



















Total
assets



$



1,039,000





$



835,000



























Liabilities
and Equity













Accounts
payable



$



136,000





$



45,000



Income
taxes payable





28,000







25,000



Common
stock, $2 par value





588,000







562,000



Paid-in
capital in excess of par value, common stock





203,000







164,000



Retained
earnings





84,000







39,000



















Total
liabilities and equity



$



1,039,000





$



835,000













































































































































GOLDEN CORPORATION
Income Statement
For Year Ended December 31, 2013



Sales









$



1,794,000



Cost of
goods sold











1,087,000

















Gross
profit











707,000



Operating
expenses













Depreciation
expense



$



57,000









Other
expenses





499,000







556,000



















Income
before taxes











151,000



Income
taxes expense











21,000

















Net income









$



130,000








































Additional Information
on Year 2013 Transactions



a.



Purchased equipment
for $135,000 cash.



b.



Issued 13,000 shares
of common stock for $5 cash per share.



c.



Declared and paid
$85,000 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.)




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