Question
1 The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for Wright Company. Additional information
1 The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for Wright Company. Additional information from Wright's accounting records is provided also. WRIGHT COMPANY Comparative Balance Sheets December 31, 2018 and 2017 50 points ($ in 000s) 2018 2017 eBook Assets Cash Accounts receivable Short-term investment Inventory $ 149 $ 125 167 170 64 25 168 165 Print Land Buildings and equipment Less: Accumulated depreciation Liabilities 126 155 785 590 (229) (170) $1,230 1,060 Accounts payable $ 50 $ 54 Salaries payable 3 4 References Interest payable 6 4 Income tax payable 5 10 Notes payable 0 39 Bonds payable 368 290 Shareholders' Equity Common stock 460 390 Paid-in capital-excess of par 219 195 Retained earnings 119 74 $1,230 $1,060 WRIGHT COMPANY Income Statement For Year Ended December 31, 2018 Revenues: Sales revenue Expenses: ($ in 000s) Cost of goods sold Salaries expense Depreciation expense Interest expense Loss on sale of land Income tax expense Net income $ 680 $ 320 88 3 580 $ 100 Additional information from the accounting records: a. Land that originally cost $29,000 was sold for $26,000. b. The common stock of Microsoft Corporation was purchased for $39,000 as a short-term investment not classified as a cash equivalent. c. New equipment was purchased for $195,000 cash. d. A $39,000 note was paid at maturity on January 1. e. On January 1, 2018, bonds were sold at their $78,000 face value. f. Common stock ($70,000 par) was sold for $94,000. g. Net income was $100,000 and cash dividends of $55,000 were paid to shareholders. WRIGHT COMPANY Statement of Cash Flows For year ended December 31, 2018 Cash flows from operating activities: Cash inflows: From customers Cash outflows: To suppliers of goods To employees For interest For income taxes ($ in 000s) $ 744 (327) (91) (57) (102) Net cash flows from operating activities. Cash flows from investing activities: Purchase of equipment Purchase of short-term investment Sale of land Net cash flows from investing activities Cash flows from financing activities: Payment of cash dividends Repayment of notes payable Sale of bonds payable Sale of common stock Net cash flows from financing activities Net increase in cash Cash balance, January 1 Cash balance, December 31 (195) (39) 26 (55) (39) 78 94 $ 167 (208) 78 37 $ 37
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