Question
The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for Wright Company. Additional information from Wright's
The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for Wright Company. Additional information from Wright's accounting records is provided also.
WRIGHT COMPANY Comparative Balance Sheets December 31, 2021 and 2020 ($ in thousands) | ||||||||
2021 | 2020 | |||||||
Assets | ||||||||
Cash | $ | 96 | $ | 80 | ||||
Accounts receivable | 122 | 125 | ||||||
Short-term investment | 58 | 28 | ||||||
Inventory | 124 | 120 | ||||||
Land | 90 | 110 | ||||||
Buildings and equipment | 645 | 500 | ||||||
Less: Accumulated depreciation | (175 | ) | (125 | ) | ||||
$ | 960 | 838 | ||||||
Liabilities | ||||||||
Accounts payable | $ | 37 | $ | 45 | ||||
Salaries payable | 4 | 6 | ||||||
Interest payable | 7 | 4 | ||||||
Income tax payable | 8 | 13 | ||||||
Notes payable | 0 | 29 | ||||||
Bonds payable | 258 | 200 | ||||||
Shareholders Equity | ||||||||
Common stock | 345 | 300 | ||||||
Paid-in capitalexcess of par | 170 | 150 | ||||||
Retained earnings | 131 | 91 | ||||||
$ | 960 | $ | 838 | |||||
WRIGHT COMPANY Income Statement For Year Ended December 31, 2021 ($ in thousands) | ||||||
Revenues: | ||||||
Sales revenue | $ | 560 | ||||
Expenses: | ||||||
Cost of goods sold | $ | 230 | ||||
Salaries expense | 98 | |||||
Depreciation expense | 50 | |||||
Interest expense | 19 | |||||
Loss on sale of land | 5 | |||||
Income tax expense | 68 | 470 | ||||
Net income | $ | 90 | ||||
Additional information from the accounting records:
- Land that originally cost $20,000 was sold for $15,000.
- The common stock of Microsoft Corporation was purchased for $30,000 as a short-term investment not classified as a cash equivalent.
- New equipment was purchased for $145,000 cash.
- A $29,000 note was paid at maturity on January 1.
- On January 1, 2021, bonds were sold at their $58,000 face value.
- Common stock ($45,000 par) was sold for $65,000.
- Net income was $90,000 and cash dividends of $50,000 were paid to shareholders.
Required: Prepare the statement of cash flows of Wright Company for the year ended December 31, 2021. 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., 10,000 should be entered as 10).)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started