Solution-Construct in good form the operating activities

Construct in good form the operating activities section

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Reference no: EM132621970

Gold Company's comparative balance sheet and income statement for last year appear below:

Statement of Financial Position

	Ending Balance	Beginning balnce
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	150,000
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:

Question 1: Construct in good form the operating activities section of the company's statement of cash flows for the year using the direct method.

Reference no: EM132621970

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Construct in good form the operating activities section

Reference no: EM132621970

Reference no: EM132621970

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