The comparative balance sheets for 2013 and 2012 and the statement of income for
ID: 2490849 • Letter: T
Question
The comparative balance sheets for 2013 and 2012 and the statement of income for 2013 are given below for Dux Company. Additional information from Dux’s accounting records is provided also.
A building that originally cost $56,000, and which was three-fourths depreciated, was sold for $12,000.
The common stock of Byrd Corporation was purchased for $7,000 as a long-term investment.
Property was acquired by issuing a 15%, seven-year, $15,000 note payable to the seller.
On January 19, Dux issued a 5% stock dividend (1,000 shares). The market price of the $10 par value common stock was $14 per share at that time.
On November 12, 1,000 shares of common stock were repurchased as treasury stock at a cost of $12,000.
Prepare the statement of cash flows for Dux Company. (Hint: Use the T-account method to assist in your analysis.) (Do not round your intermediate calculations. Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)
The comparative balance sheets for 2013 and 2012 and the statement of income for 2013 are given below for Dux Company. Additional information from Dux’s accounting records is provided also.
Explanation / Answer
Solution:
Cashflow statement Cashflow from operating activities Net income 22 Add: Depreciation 6 Add: Loss on sale building 2 Add: Interest expense 9 Add: Income Tax 43 Less: Dividend Revenue -4 Add: Decrease in accounts receivables 28 Lesss: Increase in inventory -5 Less: Decrease in accounts Payable -19 Less: decrease in salaries payable -3 Cashlflow before tax payment 79 Less: Income tax paid 44 Cashflow from operating activities 35 Cashflow from Investing activities Dividend Received 4 Sale of building 12 Purchase of Investment -7 Purchase of Equipment -14 Cashflow from Investing activities -5 Cashflow from financimg activities Interest Paid -3 Issue of Bonds 25 Cash dividends -12 Purchase of common stock -12 Cashflow from financimg activities -2 Changes in cash 28 Add: Opening Balance 38 Ending Balance 66