Question

he 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	$	33			$	20
Accounts receivable		48				50
Less: Allowance for uncollectible accounts		(4	)			(3	)
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
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

DUX COMPANY Income Statement For the Year Ended December 31, 2021 ($ in thousands)
Revenues
Sales revenue	$	200
Dividend revenue		3		$	203
Expenses
Cost of goods sold		120
Salaries expense		25
Depreciation expense		5
Bad debt expense		1
Interest expense		8
Loss on sale of building		3
Income tax expense		16			178
Net income				$	25

Additional information from the accounting records:

1. A building that originally cost $40,000, and which was three-fourths depreciated, was sold for $7,000.
2. The common stock of Byrd Corporation was purchased for $5,000 as a long-term investment.
3. Property was acquired by issuing a 13%, seven-year, $30,000 note payable to the seller.
4. New equipment was purchased for $15,000 cash.
5. On January 1, 2021, bonds were sold at their $25,000 face value.
6. 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.
7. Cash dividends of $13,000 were paid to shareholders.
8. 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 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).)

Answer 1

statement of cash flows for Dux Company using the indirect method

Dux Company

Statment of cashflow

for the Year ended Dec 31 2021

Cashflow from operating activities:

Net income : $ 25

Adjustment to reconcile net income to operating activities

Depreciation on fixed assests : $5

Loss on sale of assest : $3

Baddebt expenses : $1

Decrease in account receviables : $1

Increase in inventory : ($5)

Decrease in account payables :($7)

Decrease in Salaries payables :($3)

Increase in interest payables : $2

Decrease in income tax payables : ($1)

Net cash provided by cash operating activities :  $21

Cash flow from investment activities

Sale of building : $7

Lon term investment common stock of Byrd Corporation : ($5)   

Equipment purchased : ($15)

Bonds were sold    :$25

Net cash used in investment activities : $12

Cash flow from financing activities

Dividend paid : ($13)

Interest paid : ($8)

Proceed from issuse of share capital : $1

Net cash used in financing activities : ($20)

Net increase in cash and cash equivalents    : $13

Cash and cash equivalents as at begining of the year : $20

Cash and cash equivalents as at Closing of the year : $33  

note : 500 shares of common stock were repurchased as treasury stock at a cost of $8,000 not to consider in cash flow because no cash outflow.