Statement of cash flows; T-account method(Direct method)
| The comparative balance sheets for 2013 and 2012 and the statement of income for 2013 are given below for Dux Company. Additional information from Dux’s accounting records is provided also. |
| DUX COMPANY Comparative Balance Sheets December 31, 2013 and 2012 ($ in 000s) |
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| 2013 | 2012 | |||||
| Assets | ||||||
| Cash | $ | 52 | $ | 25 | ||
| Accounts receivable | 38 | 52 | ||||
| Dividends receivable | 4 | 3 | ||||
| Inventory | 75 | 70 | ||||
| Long-term investment | 22 | 20 | ||||
| Land | 85 | 65 | ||||
| Buildings and equipment | 180 | 200 | ||||
| Less: Accumulated depreciation | (18 | ) | (40 | ) | ||
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| $ | 438 | $ | 395 | |||
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| Liabilities | ||||||
| Accounts payable | $ | 11 | $ | 13 | ||
| Salaries payable | 4 | 8 | ||||
| Interest payable | 6 | 3 | ||||
| Income tax payable | 9 | 10 | ||||
| Notes payable | 20 | 0 | ||||
| Bonds payable | 120 | 95 | ||||
| Less: Discount on bonds | (5 | ) | (6 | ) | ||
| Shareholders’ Equity | ||||||
| Common stock | 210 | 200 | ||||
| Paid-in capital—excess of par | 24 | 20 | ||||
| Retained earnings | 48 | 52 | ||||
| Less: Treasury stock | (9 | ) | 0 | |||
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| $ | 438 | $ | 395 | |||
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| DUX COMPANY Income Statement For the Year Ended December 31, 2013 ($ in 000s) |
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| Revenues | ||||||
| Sales revenue | $ | 250 | ||||
| Dividend revenue | 4 | $ | 254 | |||
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| Expenses | ||||||
| Cost of goods sold | $ | 145 | ||||
| Salaries expense | 35 | |||||
| Depreciation expense | 8 | |||||
| Interest expense | 10 | |||||
| Loss on sale of building | 4 | |||||
| Income tax expense | $ | 29 | 231 | |||
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| Net income | $ | 23 | ||||
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| Additional information from the accounting records: |
| a. | A building that originally cost $40,000, and which was three-fourths depreciated, was sold for $6,000. |
| b. | The common stock of Byrd Corporation was purchased for $2,000 as a long-term investment. |
| c. | Property was acquired by issuing a 14%, seven-year, $20,000 note payable to the seller. |
| d. | New equipment was purchased for $20,000 cash. |
| e. | On January 1, 2013, bonds were sold at their $25,000 face value. |
| f. | 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. |
| g. | Cash dividends of $13,000 were paid to shareholders. |
| h. | On November 12, 500 shares of common stock were repurchased as treasury stock at a cost of $9,000. |
| Required: |
| Prepare the statement of cash flows for Dux Company using direct the method. (Hint: Use the T-account method to assist in your analysis.) (Do not round your intermediate calculations. Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.) |
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