The comparative balance sheets for 2018 and 2017 and the statement of income for
ID: 2523879 • Letter: T
Question
The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for Dux Company. Additional information from Dux's accounting records is provided also.
Additional information from the accounting records:
A building that originally cost $60,000, and which was three-fourths depreciated, was sold for $8,000.
The common stock of Byrd Corporation was purchased for $2,000 as a long-term investment.
Property was acquired by issuing a 13%, seven-year, $35,000 note payable to the seller.
New equipment was purchased for $25,000 cash.
On January 1, 2018, bonds were sold at their $25,000 face value.
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.
Cash dividends of $11,000 were paid to shareholders.
On November 12, 500 shares of common stock were repurchased as treasury stock at a cost of $6,000.
Required:
Prepare the statement of cash flows of Dux Company for the year ended December 31, 2018. Present cash flows from operating activities by the direct method. (Do not round your intermediate calculations. Enter your answers in thousands (i.e., 5,000 should be entered as 5). Amounts to be deducted should be indicated with a minus sign.)
Comparative Balance Sheets
December 31, 2018 and 2017
($ in 000s) 2018 2017 Assets Cash $ 81 $ 56 Accounts receivable 59 60 Less: Allowance for uncollectible accounts (3 ) (2 ) Dividends receivable 7 6 Inventory 50 45 Long-term investment 32 30 Land 70 35 Buildings and equipment 275 310 Less: Accumulated depreciation (51 ) (90 ) $ 520 $ 450 Liabilities Accounts payable $ 59 $ 73 Salaries payable 3 6 Interest payable 9 4 Income tax payable 8 16 Notes payable 35 0 Bonds payable 95 70 Less: Discount on bonds (5 ) (6 ) Shareholders' Equity Common stock 210 200 Paid-in capital—excess of par 24 20 Retained earnings 88 67 Less: Treasury stock (at cost) (6 ) 0 $ 520 $ 450
Explanation / Answer
Cash from Operating activities 40 Collection from Debtors 301 Dividend Income 6 Paid to Suppliers -189 Paid for Salaries -48 Income Tax -30 Cash from Investing Activities -60 Sale of Building 8 Purcahse of Common Stock -2 Purcahse of Equipment -25 Purcahse of Treasury Stock -6 Purcahse of Land -35 Cash from Financing Activities 45 Sale of Bonds 26 Dividend -11 Issuance of Note payable 35 Interest Paid -5 Debtor (net of uncollectable) Opening Balnace 60 Add: Sales 300 Less: Closing Balance 59 Collection 301 Dividend Income Opening Balnace 6 Add: Divident Income 7 Less: Closing Balance 7 Collection 6 Suppliers Opening Balance 73 Add: Purchases 175 Less: Closing Balance 59 Amount Paid 189 Purcahses Closing Balance 50 Add: Cost of goods sold 170 Less: Openning Balance 45 Purchases 175 Salaries Opening Balance 6 Add: Booked in P&L 45 Less: Closing Balance 3 Amount Paid 48 Income Tax Paid Opening Balance 16 Add: Provision in PL 22 Less: Closing Balance 8 Amount Paid 30 Interest Paid Opening Balance 4 Add: Provision in PL 10 Less: Closing Balance 9 Amount Paid 5