Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for Dux Company. Additional information from Dux's

The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for Dux Company. Additional information from Dux's accounting records is provided also.

DUX COMPANY

Comparative Balance Sheets

December 31, 2021 and 2020

($ in thousands) 2021 2020

Assets

Cash $ 99.0 $ 31.0

Accounts receivable 59.0 61.0

Less: Allowance for uncollectible accounts (4.0 ) (3.0 )

Dividends receivable 14.0 13.0

Inventory 66.0 61.0

Long-term investment 26.0 21.0

Land 81.0 40.0

Buildings and equipment 181.0 261.0

Less: Accumulated depreciation (10.0 ) (105.0 )

$ 512.0 $ 380.0

Liabilities

Accounts payable $ 24.0 $ 31.0

Salaries payable 13.0 16.0

Interest payable 15.0 13.0

Income tax payable 18.0 19.0

Notes payable 41.0 0

Bonds payable 96.0 60.0

Less: Discount on bonds (2.0 ) (3.0 )

Shareholders' Equity

Common stock 210.0 200.0

Paid-in capitalexcess of par 24.0 20.0

Retained earnings 81.0 24.0

Less: Treasury stock (8.0 ) 0

$ 512.0 $ 380.0

DUX COMPANY

Income Statement

For the Year Ended December 31, 2021

($ in thousands)

Revenues

Sales revenue $ 365.0

Dividend revenue 14.0 $ 379.0

Expenses

Cost of goods sold 142.0

Salaries expense 47.0

Depreciation expense 1.0

Bad debt expense 1.0

Interest expense 30.0

Loss on sale of building 25.0

Income tax expense 38.0 284.0

Net income $ 95.0

Additional information from the accounting records:

  1. A building that originally cost $128,000, and which was three-fourths depreciated, was sold for $7,000.
  2. The common stock of Byrd Corporation was purchased for $5,000 as a long-term investment.
  3. Property was acquired by issuing a 13%, seven-year, $41,000 note payable to the seller.
  4. New equipment was purchased for $48,000 cash.
  5. On January 1, 2021,bonds were sold at their $36,000 face value.
  6. 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.
  7. Cash dividends of $24,000 were paid to shareholders.
  8. On November 12, 12,500 shares of common stock were repurchased as treasury stock at a cost of $8,000.

Required:

Prepare the statement of cash flows for Dux Company using the indirect method. (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).)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Government and Not-for-Profit Accounting Concepts and Practices

Authors: Michael H. Granof, Saleha B. Khumawala, Thad D. Calabrese, Daniel L. Smith

8th edition

1119495814, 1119495857, 1119495819, 9781119495819 , 978-1119495857

More Books

Students also viewed these Accounting questions

Question

What is quality of work life ?

Answered: 1 week ago

Question

What is meant by Career Planning and development ?

Answered: 1 week ago

Question

What are Fringe Benefits ? List out some.

Answered: 1 week ago

Question

3. It is the commitment you show that is the deciding factor.

Answered: 1 week ago