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).)
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).)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 14P
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Problem 21-16 (Algo) Statement of cash flows; indirect method [LO21-4, 21-8]
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 | $ | 117.0 | $ | 34.0 | ||||
Accounts receivable | 62.0 | 64.0 | ||||||
Less: Allowance for uncollectible accounts | (3.0 | ) | (2.0 | ) | ||||
Dividends receivable | 17.0 | 16.0 | ||||||
Inventory | 69.0 | 64.0 | ||||||
Long-term investment | 29.0 | 24.0 | ||||||
Land | 84.0 | 40.0 | ||||||
Buildings and equipment | 169.0 | 264.0 | ||||||
Less: |
(7.0 | ) | (120.0 | ) | ||||
$ | 537.0 | $ | 384.0 | |||||
Liabilities | ||||||||
Accounts payable | $ | 27.0 | $ | 34.0 | ||||
Salaries payable | 16.0 | 19.0 | ||||||
Interest payable | 18.0 | 16.0 | ||||||
Income tax payable | 21.0 | 22.0 | ||||||
Notes payable | 44.0 | 0 | ||||||
Bonds payable | 93.0 | 54.0 | ||||||
Less: Discount on bonds | (2.0 | ) | (3.0 | ) | ||||
Shareholders' Equity | ||||||||
Common stock | 210.0 | 200.0 | ||||||
Paid-in capital—excess of par | 24.0 | 20.0 | ||||||
94.0 | 22.0 | |||||||
Less: |
(8.0 | ) | 0 | |||||
$ | 537.0 | $ | 384.0 | |||||
DUX COMPANY Income Statement For the Year Ended December 31, 2021 ($ in thousands) |
||||||
Revenues | ||||||
Sales revenue | $ | 410.0 | ||||
Dividend revenue | 17.0 | $ | 427.0 | |||
Expenses | ||||||
Cost of goods sold | 148.0 | |||||
Salaries expense | 53.0 | |||||
Depreciation expense | 1.0 | |||||
1.0 | ||||||
Interest expense | 36.0 | |||||
Loss on sale of building | 31.0 | |||||
Income tax expense | 44.0 | 314.0 | ||||
Net income | $ | 113.0 | ||||
Additional information from the accounting records:
- A building that originally cost $152,000, and which was three-fourths depreciated, was sold for $7,000.
- The common stock of Byrd Corporation was purchased for $5,000 as a long-term investment.
- Property was acquired by issuing a 13%, seven-year, $44,000 note payable to the seller.
- New equipment was purchased for $57,000 cash.
- On January 1, 2021, bonds were sold at their $39,000 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 $27,000 were paid to shareholders.
- 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).)
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