The comparative balance sheets for 2016 and 2015 and the statement of income for
ID: 2569989 • 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.
DUX COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2016 and 2015 ($ in 000s)
Year
Assets 2016 2015
Cash $ 39 23
Accounts Receivable 47 53
Inventory 61 53
L/T Investment 21 13
Land 81 43
Buildings and Equipment 222 256
Less: Accumulated depreciation (28) (56)
$ 448 $ 389
Liabilities
Accounts payable $ 16 $ 26
Salaries payable 5 7
Interest payable 7 4
Income tax payable 10 13
Notes payable 38 0
Bonds payable 101 73
Less: Discount on bonds (5) (9)
Shareholder’s Equity
Common stock 213 203
Paid-in capital—excess of par 27 23
Retained earnings 47 49
Less: Treasury Stock (11) 0
$ 448 $ 389
DUX COMPANY
Income Statement
For the Year Ended December 31, 2016
($ in 000s)
Revenues
Sales Revenue 225
Dividend Revenue 6 $231
____
Expenses
Costs of goods sold 123
Salaries expense 28
Depreciation expense 11
Interest expense 11
Loss on sale of building 5
Income tax expense 20 198
____ _____
Net income $ 33
Additional information from the accounting records:
a.
A building that originally cost $52,000, and which was three-fourths depreciated, was sold for $8,000.
b.
The common stock of Byrd Corporation was purchased for $8,000 as a long-term investment.
c.
Property was acquired by issuing a 15%, seven-year, $38,000 note payable to the seller.
d.
New equipment was purchased for $18,000 cash.
e.
On January 1, 2016, $28,000 of bonds were sold at face value.
f.
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.
g.
Cash dividends of $21,000 were paid to shareholders.
h.
On November 22,000 shares of common stock were repurchased as treasury stock at a cost of $11,000.
Required:
Prepare the statement of cash flows for Dux Company using the indirect method. (Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands. (i.e., 10,000 should be entered as 10).))
DUX COMPANY
Statement of Cash Flows
For year ended December 31, 2016 ($ in 000s)
Adjustments for noncash effects:
Changes in operating assets and liabilities:
Cash balance, January 1
Additional information from the accounting records:
Explanation / Answer
Statement of Cash Flows AS ON DECEMBER 31 2016 Amount in $ Amount in $ Net income (Net income Less Deferred tax liabiltity $ 10) Cash flows from operating activities $ 33.00 Adjustments for: Depreciation $ 11.00 Loss on sale of Building $ 5.00 $ 16.00 (Increase) / Decrease in Account receivables $ 6.00 Inventory Decrease / (Increase) $ -8.00 Salaries Payable $ -2.00 Interest Payable $ 3.00 Accounts payable Increase / ( Decrese) $ -10.00 $ -11.00 Net cash from operating activities $ 38.00 Cash flows from investing activities Sale of Investment L/T Investment $ -8.00 Sale of Building $ 8.00 Purchase of Equipment $ -18.00 Net cash used in investing activities $ -18.00 Cash flows from Financing activities Purchase of Treasury Stock Bonds issue $ 28.00 Dividend Paid $ -21.00 Purcashe of Commons stock $ -11.00 Issue of Common Stock $ - Net cash used in financing activities $ -4.00 Net increase in cash and cash equivalents $ 16.00 Add :Cash and cash equivalents at beginning of period $ 23.00 Cash and cash equivalents at end of period $ 39.00