Question

The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for Dux Company Additional information from Dux's accounting records is provided also. Comparative Balance Sheets Decenber 31, 2018 and 20117 (s in eees) s 43 25 49 57 Cash Accounts recelvable Less: Allowance for uncollectible accounts Dividends receivable Inventory Long-term investment 65 55 25 15 87 45 220 268 Buildings and equipment Less: Accumulated depreciation $ 462 $ 48 Liabilities Accounts payable Salaries payable Interest payable Incone tax payable Notes payable Bonds payable $ 18 $ se 12 42 105 13 75 Less: Discount on bonds Shareholders' Equity Common stock Paid-in capital-excess of par Retained earning (7) (33) 215 31 43 2e5 25 Less: Treasury stock 5 462 480 Income S For Year Ended December 31, 2818 Sales revenue Dividend revenue s 245 248 Expenses Cost of epods sold Salarles expense Depreciation expense Bad debt expense Loss on sale of building Income tax expense Net income 22 208 Additional information from the accounting records a. A building that onginally cost $60,000, and which was three-fourths depreciated, was sold for $13.,000 b. The common stock of Byrd Corporation was purchased for $10,000 as a long-term investment c Property was acquired by issuing a 10%, seven-year, $42,000 note payable to the seller d. New equipment was purchased for $20,000 cash. e. On January 1, 2018, bonds were sold at their $30,000 face value fOnla ary 19, Dux issued a 3% stock di dend (1000 shares. The market price of the sopar vale come stock was sis per share at that time g Cash dividends of $30,000 were paid to shareholders. h On November 26,000 shares of common stock were repurchased as treasury stock at a cost of $13,000

Answer 1

Cash flow indirect method
Cash flow from operating activities
Net income		40
Adjustments to reconcile the net income
Depreciation and Amortization expense	15
Interest expense	13
Loss on sale of building	2
Changes in current asset and liabilities
Increase in dividend receivable	-1
Decrease in accounts receivable	9
Increase in inventory	-10
decrease in accounts payable	-12
Decrease in salaries payable	-1
Increase in interest payable	1
decrease in income tax payable	-1
		15
Cash generated from operations		55
Cash flow from Investing activities
Equipment purchased	-20
Building sold	13
Long term investment	-10
Cash flow from Investing activities		-17