Problem 21 4A Prepare a statement of cash flows; direct method The comparative given below for Dux Company. Additional information from Dux's accounting records is provided also. balance sheets for 2018 and 2017 and the statement of income for 2018 are DUX COMPANY Comparative Balance Sheets December 31, 2018 and 2017 (S in 000s) 2018 2017 S 72 S 27 Accounts receivable Dividends receivable Long-term investment Buildings and equipment 95 90 95 194 34 493 75 220 Less: Accumulated depreciation S435 Accounts payable Salaries payable Interest payable Income tax payable Notes payable Bonds payable S 76 S 83 10 Less: Discount on bonds Shareholders' Equity Common stock Paid-in capital excess of par Retained earnings 200 20 Less: Treasury stock (at cost) S 493 S435 DUX COMPANY Income Statement For the Year Ended December 31, 2018 (S in 000s) Sales revenue Dividend revenue S 270 6 276 Expenses Cost of goods sold Salaries expense Depreciation expense Interest expense Loss on sale of building Income tax expense 10 234 S 42 Net income Additional information from the accounting records a. A building that originally cost $48,000, and which was three-fourths depreciated, was sold for $8,000 The common stock of Byrd Corporation was purchased for $3,000 as a long-lerm investment. Property was acquired by issuing a 10%, seven-year, S20.000 note payable to the seller. New equipment was purchased for $22.000 cash. On January1, 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 S12,000 were paid to shareholders. On November 12, 1,000 shares of common stock were repurchased as treasury stock at a cost of S11,000. b. c. d. e. f. g. h. 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. Prepare the reconciliation between net income and cash flows from operating activities if needed