Question

The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for Wright Company. Additional information from Wright's accounting records is provided also.

WRIGHT COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ in 000s)
	2018				2017
Assets
Cash	$	82			$	45
Accounts receivable		87				90
Short-term investment		36				14
Inventory		89				85
Land		62				75
Buildings and equipment		540				430
Less: Accumulated depreciation		(133	)			(90	)
	$	763				649
Liabilities
Accounts payable	$	29			$	38
Salaries payable		6				8
Interest payable		5				3
Income tax payable		8				12
Notes payable		0				22
Bonds payable		174				130
Shareholders’ Equity
Common stock		280				230
Paid-in capital—excess of par		140				115
Retained earnings		121				91
	$	763			$	649

WRIGHT COMPANY Income Statement For Year Ended December 31, 2018 ($ in 000s)
Revenues:
Sales revenue				$	390
Expenses:
Cost of goods sold	$	160
Salaries expense		46
Depreciation expense		43
Interest expense		12
Loss on sale of land		5
Income tax expense		54			320
Net income				$	70

Additional information from the accounting records:

1. Land that originally cost $13,000 was sold for $8,000.
2. The common stock of Microsoft Corporation was purchased for $22,000 as a short-term investment not classified as a cash equivalent.
3. New equipment was purchased for $110,000 cash.
4. A $22,000 note was paid at maturity on January 1.
5. On January 1, 2018, bonds were sold at their $44,000 face value.
6. Common stock ($50,000 par) was sold for $75,000.
7. Net income was $70,000 and cash dividends of $40,000 were paid to shareholders.

Required:
Prepare the statement of cash flows of Wright Company for the year ended December 31, 2018. Present cash flows from operating activities by the direct method. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands (i.e., 5,000 should be entered as 5).)

Answer 1

All the necessary workings related to above statement are as follows.

Please refer the below mentioned images.