The comparative balance sheets for 2016 and 2015 and the statement of income for 2016 are given below for Dux Company. Additional information from Dux’s accounting records is provided also.
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DUX COMPANY Comparative Balance Sheets December 31, 2016 and 2015($ in 000s) |
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|
2016 |
2015 |
|
Assets |
|
|
|
Cash |
$ 33 |
$ 20 |
|
Accounts receivable |
44 |
47 |
|
Dividends receivable |
3 |
2 |
|
Inventory |
55 |
50 |
|
Long-term investment |
15 |
10 |
|
Land |
70 |
40 |
|
Buildings and equipment |
225 |
250 |
|
Less: Accumulated depreciation |
(25) |
(50) |
|
|
$420 |
$369 |
|
Liabilities |
2016 |
2015 |
|
Accounts payable |
$ 13 |
$ 20 |
|
Salaries payable |
2 |
5 |
|
Interest payable |
4 |
2 |
|
Income tax payable |
7 |
8 |
|
Notes payable |
30 |
0 |
|
Bonds payable |
95 |
70 |
|
Less: Discount on bonds |
(2) |
(3) |
|
Shareholders’ Equity |
|
|
|
Common stock |
210 |
200 |
|
Paid-in capital—excess of par |
24 |
20 |
|
Retained earnings |
45 |
47 |
|
Less: Treasury stock |
(8) |
0 |
|
|
$420 |
$369 |
|
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Additional information from the accounting records:
· A building that originally cost $40,000, 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, $30,000 note payable to the seller.
· New equipment was purchased for $15,000 cash.
· On January 1, 2016, 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 $13,000 were paid to shareholders.
· On November 12, 500 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, 2016. Present cash flows from operating activities by the direct method. (You may omit the schedule to reconcile net income to cash flows from operating activities.)
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