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.

DUX COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ in 000s)
	2018				2017
Assets
Cash	$	52			$	31
Accounts receivable		41				78
Less: Allowance for uncollectible accounts		(3	)			(2	)
Dividends receivable		4				3
Inventory		100				95
Long-term investment		54				50
Land		95				85
Buildings and equipment		162				200
Less: Accumulated depreciation		(38	)			(80	)
	$	467			$	460
Liabilities
Accounts payable	$	46			$	82
Salaries payable		6				9
Interest payable		7				2
Income tax payable		5				6
Notes payable		10				0
Bonds payable		80				50
Less: Discount on bonds		(5	)			(6	)
Shareholders' Equity
Common stock		210				200
Paid-in capital—excess of par		24				20
Retained earnings		93				97
Less: Treasury stock (at cost)		(10	)			0
	$	467			$	460

DUX COMPANY Income Statement For the Year Ended December 31, 2018 ($ in 000s)
Revenues
Sales revenue	$	370
Dividend revenue		4		$	374
Expenses
Cost of goods sold	$	245
Salaries expense		38
Depreciation expense		9
Bad debt expense		1
Interest expense		10
Loss on sale of building		2
Income tax expense	$	45			350
Net income				$	24

Additional information from the accounting records:

a.    A building that originally cost $68,000, and which was three-fourths depreciated, was sold for $15,000.

b.    The common stock of Byrd Corporation was purchased for $4,000 as a long-term investment.

c.    Property was acquired by issuing a 15%, seven-year, $10,000 note payable to the seller.

d.    New equipment was purchased for $30,000 cash.

e.    On January 1, 2018, bonds were sold at their $30,000 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, 1,000 shares of common stock were repurchased as treasury stock at a cost of $10,000.

Required:
Prepare the T-accounts for Dux Company. (Do not round your intermediate calculations. Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)

Answer 1

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Building and Equipment

Common Stock

Cash

Accounts Receivable

Salaries Payable

Debit

Credit

Debit

Credit

Debit

Credit

Debit

Credit

Debit

Credit

Beginning

$ 200.00

a

$        68.00

Beginning

$ 200.00

Beginning

$    31.00

b

$      4.00

Beginning

$    78.00

Cash

$ 407.00

Payment

$    41.00

Beginning

$      9.00

d

$    30.00

f

$    10.00

a

$    15.00

d

$    30.00

Sales

$ 370.00

Salaries Expense

$    38.00

e

$    30.00

g

$    13.00

Ending

$ 210.00

Acc Rec

$ 407.00

h

$    10.00

Ending

$ 162.00

Dividend

$      3.00

Vendor Pay

$ 286.00

Salary Pay

$    41.00

Ending

$    41.00

Ending

$      6.00

Interest

$      4.00

Income Tax

$    46.00

Accounts Payable

Interest Payable

Land

Accumulated Dep-Building and Equip

Debit

Credit

Debit

Credit

Debit

Credit

Debit

Credit

Payment

$ 286.00

Beginning

$    82.00

Payment

$      4.00

Beginning

$      2.00

Beginning

$    85.00

a

$        51.00

Beginning

$    80.00

Ending

$    52.00

Pur

$ 250.00

Discount

$      1.00

Interest Expense

$    10.00

c

$    10.00

Dep Exp

$      9.00

Ending

$    38.00

Retained Earning

Ending

$    95.00

Debit

Credit

Ending

$    46.00

Ending

$      7.00

Disc

$      1.00

Beginning

$    97.00

Bond Payable

Additional Paid In Capital

f

$    14.00

Net Income

$    24.00

Discount on Bond

Income Tax Payable

Debit

Credit

Debit

Credit

g

$    13.00

Debit

Credit

Debit

Credit

Beginning

$        50.00

Beginning

$    20.00

Beginning

$      6.00

Discount

$      1.00

Payment

$    46.00

Beginning

$      6.00

e

$        30.00

f

$      4.00

$    93.00

Expense

$    45.00

Ending

$      5.00

Long Term Investment

Ending

$        80.00

Ending

$    24.00

Debit

Credit

Beginning

$    50.00

Ending

$      5.00

Treasury Stock

b

$      4.00

Inventory

Debit

Credit

Debit

Credit

Beginning

$              -

Beginning

$    95.00

COGS

$ 245.00

h

$        10.00

Ending

$    54.00

Pur

$ 250.00

Ending

$ 100.00

Note Payable

Ending

$        10.00

Debit

Credit

Beginning

$          -

c

$    10.00

Ending

$    10.00