The comparative balance sheets for 2016 and 2015 and the statement of income for
ID: 2529328 • Letter: T
Question
The comparative balance sheets for 2016 and 2015 and the statement of income for 2016 are given below for Dux Company. Additional information from Dux's accounting records is provided also.
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 $10,000.
Prepare the statement of cash flows of Dux Company for the year ended December 31, 2016. 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.)
The comparative balance sheets for 2016 and 2015 and the statement of income for 2016 are given below for Dux Company. Additional information from Dux's accounting records is provided also.
Explanation / Answer
Statement of cash flows for the year ended December 31, 2016 (Direct method) Cash flow from operating activities Cash collection from sale (Note 1) 355000 Cash payment for cost of goods sold (Note 2) -232000 Cash payment for salaries (Note 3) -30000 Cash payment for interest (Note 4) -6000 Cash payment of income taxes (Note 5) -31000 Net cash flow from operating activities 56000 Cash flow from investing activities Sale of building (Note 6) 9000 Purchase of equipment -39000 Net cash flow from investing activities -30000 Cash flow from financing activities Issue of bonds 25000 Purchase of treasury stock -10000 Cash dividends paid -14000 Net cash flow from financing activities 1000 Net cash flow 27000 Cash balance as on July1, 2016 35000 Cash balance as on June 30, 2017 62000 Cash from sale Accounts receivable as on December 31, 2015 62000 Plus : Sale for the year 350000 Total 412000 Accounts receivable as on December 31, 2016 57000 Cash collection from sale (Note 1) 355000 Cash payment for cost of goods sold Cost of goods sold for the year 195000 Plus: Balance of inventory on December 31, 2016 75000 Total 270000 Less: Balance of inventory on December 31, 2015 70000 Purchase of inventory 200000 Plus: Balance of accounts payable on December 31,2015 73000 273000 Less: Balance of accounts payable on December 31,2016 41000 Cash payment for cost of goods sold (Note 2) 232000 Cash payment for salaries Salaries expense for the year 28000 Plus: Beginning salaries payable 4000 Total 32000 Less: Ending salaries payable 2000 Cash payment for salaries (Note 3) 30000 Cash payment for interest Interest expense for the year 10000 Plus: Beginning interest payable 5000 Total 15000 Less: Ending interest payable 9000 Cash payment for interest (Note 4) 6000 Cash payment for income tax Income tax expense for the year 28000 Plus: Beginning income tax payable 8000 Total 36000 Less: Ending income tax payable 5000 Cash payment for income tax (Note 5) 31000 Sale of building Cost of the building sold 48000 Less: Depreciation 36000 Net value of building 12000 Less: Loss on sale of building 3000 Cash received from sale of building (Note 6) 9000