Reference no: EM132626657
Gold Company's comparative balance sheet and income statement for last year appear below:
Statement of Financial Position
Ending Beginning
Balance Balance
Cash......................................................................... $ 70,000 $ 38,000
Accounts receivable................................................ 76,000 52,000
Inventory................................................................. 24,000 42,000
Prepaid expenses..................................................... 8,000 16,000
Long-term investments........................................... 260,000 210,000
Plant and equipment................................................ 530,000 510,000
Accumulated depreciation...................................... ( 398,000) ( 350,000)
Total assets.............................................................. $570,000 $518,000
Accounts payable.................................................... $ 32,000 $ 54,000
Accrued liabilities................................................... 34,000 25,000
Taxes payable.......................................................... 4,000 11,000
Bonds payable......................................................... 160,000 200,000
Deferred taxes......................................................... 38,000 25,000
Common stock........................................................ 150,000 120,000
Retained earnings.................................................... 152,000 83,000
Total liabilities and owners' equity........................ $570,000 $518,000
Income Statement
Sales........................................................................$610,000
Cost of goods sold...................................................310,000
Gross margin...........................................................300,000
Selling and administrative expense.........................190,000
Net operating income..............................................110,000
Income taxes...........................................................33,000
Net income..............................................................$ 77,000
The company declared and paid $8,000 in cash dividends during the year.
Required:
Problem 1: Construct in good form the operating activities section of the company's statement of cash flows for the year using the direct method.