UX COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ in 000s) 2018, 2017 Assets...

UX COMPANY
Comparative Balance Sheets
December 31, 2018 and 2017
($ in 000s)

2018, 2017

Assets :(Cash $67.... $37) (Accounts receivable $61.....$81) (Less: Allowance for uncollectible accounts:$(6)....$(5) )(Dividends receivable $4.....$3) (Inventory $89...$67 ) (Long-term investment $49...$27 ) (Land $143....$73 ) (Buildings and equipment $208...$284 )(Less: Accumulated depreciation $(42)....$(84) totals $573 ....$483

Liabilities : (Accounts payable $30....$54 ) (Salaries payable $4 ...$10 ) (Interest payable $6 ....$4 ) (Income tax payable $24.... $30 ) (Notes payable $70 ... 0 ) (Bonds payable $129....$87 ) (Less: Discount on bonds $(19)...$(37)

Shareholders' Equity: (Common stock $227....$217 ) (Paid-in capital—excess of par $38...$37 ) (Retained earnings $84....$81 ) (Less: Treasury stock $(20)...0 ) ( totals $573....$483 )

DUX COMPANY Income Statement For Year Ended December 31, 2018 ($ in 000s)
Revenues
Sales revenue	$	360
Dividend revenue		9	$	369
Expenses
Cost of goods sold		137
Salaries expense		42
Depreciation expense		39
Bad debt expense		1
Interest expense		25
Loss on sale of building		3
Income tax expense		34		281
Net income			$	88

Additional information from the accounting records:

1. A building that originally cost $108,000, and which was three-fourths depreciated, was sold for $24,000. 2. The common stock of Byrd Corporation was purchased for $22,000 as a long-term investment. 3. Property was acquired by issuing a 15%, seven-year, $70,000 note payable to the seller. 4. New equipment was purchased for $32,000 cash. 5. On January 1, 2018, bonds were sold at their $42,000 face value.6. On January 19, Dux issued a 3% stock dividend (1,000 shares). The market price of the $10 par value common stock was $11 per share at that time. 7. Cash dividends of $74,000 were paid to shareholders. 8. On November 40,000 shares of common stock were repurchased as treasury stock at a cost of $20,000.

Required:
Prepare the statement of cash flows for Dux Company using the indirect method. (Do not round intermediate calculations. 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).))

Expert Solution



UX COMPANY
Statement of Cash Flows
For the Years Ending December 31, 2018
($ in 000s)

Cash Flows from Operating Activities
Net Income		$88
Add Expenses Not Requiring Cash:
Depreciation		39
Bad Debt Expense		1
Discount on bonds (Note 1)		18
Other Adjustments:
Add Tax Expense*		34
Add Decrease in Accounts Receivables		20
Add Loss on sale of building		3
Add Increase in interest payable		2
Subtract Increase in Accounts Receivable
Subtract Dividend Revenue		(9)
Subtract Increase in Inventory		(22)
Subtract Reduction in Accounts Payable		(24)
Subtract Reduction in Salaries Payable		(6)

Subtract Payment of Taxes**		(40)

Net Cash Generated by Operating Activities		$104

Cash Flows from Investing Activities
Sale of Building		24
Purchase of shares of Byrd Corporation		(22)
Dividend Received***		8
Purchase of New equipment		(32)

Net Cash Used by Investing Activities		-$22

Cash Flows from Financing Activities
Repurchase of treasury stock		-$20
Issue of Bonds		42
Payment of Dividend		(74)

Net Cash used by Financing Activities		-$52

NET INCREASE/(DECREASE) IN CASH		$30
CASH, BEGINNING OF YEAR		37
CASH, END OF YEAR		$67

Note 1
Discount on bonds amortisation is shown as interest expense. As amortisation does not require
any cash outflow, so it is added back.

Note 2
Shares issued by stock dividend does not affect cash flow statement, as it does not require
cash outflow.




* As payment of taxes is separately considered, tax expense is added back.

*** Opening balance of Tax payable	30
Add: Tax expense	34
Less: Closing balance of tax payable	(24)

Tax paid	40


*** Opening balance of dividend receivable	3
Add: Dividend Revenue	9
Less: Closing balance of dividend receivable	(4)

Dividend received	8

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