DUX COMPANY Income Statement For the Year Ended December 31, 2018 ($ in 2008) Revenues Sales revenue $ 200 Dividend revenue 3 $ 203 Expenses Cost of goods sold Salaries expense Depreciation expense Bad debt expense Interest expense Loss on sale of building Income tax expense 178 Net income $ 25 16W Puto Additional information from the accounting records: a. A building that originally cost $40,000, and which was three-fourths depreciated, was sold for $7,000. b. The common stock of Byrd Corporation was purchased for $5,000 as a long-term investment. c. Property was acquired by issuing a 13%, seven-year, $30,000 note payable to the seller. d. New equipment was purchased for $15,000 cash. e. On January 1, 2018, bonds were sold at their $25,000 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 $13,000 were paid to shareholders. h. On November 12, 500 shares of common stock were repurchased as treasury stock at a cost of $8,000. DUX COMPANY Statement of Cash Flows For year ended December 31, 2018 ($ in 000s) Cash flows from operating activities: Net income $ 25 Adjustments for noncash effects: Depreciation expense Amortization of discount Loss on sale of building Changes in operating assets and liabilities: Decrease in accounts receivable Increase in dividends receivable Increase in inventory Decrease in accounts payable Decrease in salaries payable Increase in interest payable Decrease in income tax payable Increase in allowance for uncollectibles (5) (7) Net cash flows from operating activities 22 Cash flows from investing activities: Sale of building (15) Purchase of equipment Purchase of long-term investment (5) 0 Net cash flows from investing activities (13) 25 Cash flows from financing activities: Sale of bonds payable Payment of cash dividends Purchase of treasury stock (13) (8) Net cash flows from financing activities Net increase in cash Cash balance, January 1 Cash balance, December 31 Noncash investing and financing activities
