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 $ 102 $ 48
Accounts receivable 53 67
Less: Allowance for uncollectible accounts (3 ) (2 )
Dividends receivable 5 4
Inventory 90 85
Long-term investment 52 46
Land 95 75
Buildings and equipment 202 220
Less: Accumulated depreciation (52 ) (90 )
$ 544 $ 453
Liabilities
Accounts payable $ 37 $ 64
Salaries payable 2 7
Interest payable 10 4
Income tax payable 10 11
Notes payable 20 0
Bonds payable 85 60
Less: Discount on bonds (3 ) (4 )
Shareholders' Equity
Common stock 210 200
Paid-in capitalexcess of par 24 20
Retained earnings 157 91
Less: Treasury stock (8 ) 0
$ 544 $ 453

DUX COMPANY Income Statement For the Year Ended December 31, 2021 ($ in thousands)
Revenues
Sales revenue $ 380
Dividend revenue 5 $ 385
Expenses
Cost of goods sold 210
Salaries expense 34
Depreciation expense 7
Bad debt expense 1
Interest expense 8
Loss on sale of building 2
Income tax expense 29 291
Net income $ 94

Additional information from the accounting records:

A building that originally cost $60,000, and which was three-fourths depreciated, was sold for $13,000.

The common stock of Byrd Corporation was purchased for $6,000 as a long-term investment.

Property was acquired by issuing a 13%, seven-year, $20,000 note payable to the seller.

New equipment was purchased for $42,000 cash.

On January 1, 2021, 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 $14,000 were paid to shareholders.

On November 12, 1,000 shares of common stock were repurchased as treasury stock at a cost of $8,000.

Required: Prepare the statement of cash flows of Dux Company for the year ended December 31, 2021. Present cash flows from operating activities by the direct method. (Do not round your intermediate calculations. Enter your answers in thousands (i.e., 10,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.)

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

Step: 3

blur-text-image

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

ISE Fundamental Managerial Accounting Concepts

Authors: Thomas Edmonds, Christopher Edmonds, Mark Edmonds, Philip Olds

9th Edition

1260565483, 9781260565485

More Books

Students also viewed these Accounting questions