Question
The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for Wright Company Additional information from
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 ($ in 000s) Assets Cash Accounts receivable Short-term investment Inventory Land Buildings and equipment Less: Accumulated depreciation Liabilities Accounts payable Salaries payable Interest payable Income tax payable Notes payable Bonds payable Shareholders' Equity Common stock Paid-in capital-excess of par Retained earnings 2018 2017 $ 79 $ 40 83 85 33 12 83 80 58 70 525 420 (127) (85) $ 734 622 29 37 4 7 4 6 11 21 162 120 265 220 145 110 119 94 $ 734 $ 622 WRIGHT COMPANY Income Statement For Year Ended December 31, 2018 Revenues: Sales revenue Expenses: ($ in 000s) Cost of goods sold $ 370 $ 150 Salaries expense 49 Depreciation expense 42 Interest expense 11 Loss on sale of land 6 Income tax expense 52 310 Net income $ 60 Additional information from the accounting records: a. Land that originally cost $12,000 was sold for $6,000. b. The common stock of Microsoft Corporation was purchased for $21,000 as a short-term investment not classified as a cash equivalent. c. New equipment was purchased for $105,000 cash. d. A $21,000 note was paid at maturity on January 1. e. On January 1, 2018, bonds were sold at their $42,000 face value. f. Common stock ($45,000 par) was sold for $80,000. g. Net income was $60,000 and cash dividends of $35,000 were paid to shareholders. Required: Prepare the statement of cash flows of Wright Company for the year ended December 31, 2018. Present cash flows from operating activities by the direct method. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands (i.e., 5,000 should be entered as 5).) WRIGHT COMPANY Statement of Cash Flows For year ended December 31, 2018 Cash flows from operating activities: Cash inflows: ($ in 000s) Cash outflows: Net cash flows from operating activities. Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: 69 $ 0 0 Net cash flows from operating activities. Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: Net cash flows from financing activities Cash balance, January 1 Cash balance, December 31 $ 0 0 0 $ 0
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