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In: Accounting

The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are...

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 $ 51 $ 40
Accounts receivable 64 80
Less: Allowance for uncollectible accounts (6 ) (5 )
Dividends receivable 3 2
Inventory 95 90
Long-term investment 53 48
Land 105 80
Buildings and equipment 182 230
Less: Accumulated depreciation (60 ) (100 )
$ 487 $ 465
Liabilities
Accounts payable $ 38 $ 66
Salaries payable 4 8
Interest payable 6 5
Income tax payable 11 12
Notes payable 25 0
Bonds payable 90 65
Less: Discount on bonds (4 ) (5 )
Shareholders' Equity
Common stock 210 200
Paid-in capital—excess of par 24 20
Retained earnings 91 94
Less: Treasury stock (at cost) (9 ) 0

DUX COMPANY
Income Statement
For the Year Ended December 31, 2018
($ in 000s)

Revenues
Sales revenue $ 360
Dividend revenue 3 $ 363
Expenses
Cost of goods sold $ 240
Salaries expense 36
Depreciation expense 8
Bad debt expense 1
Interest expense 9
Loss on sale of building 2
Income tax expense $ 44 340
Net income $ 23


Additional information from the accounting records:

A building that originally cost $64,000, and which was three-fourths depreciated, was sold for $14,000.

The common stock of Byrd Corporation was purchased for $5,000 as a long-term investment.

Property was acquired by issuing a 14%, seven-year, $25,000 note payable to the seller.

New equipment was purchased for $16,000 cash.

On January 1, 2018, bonds were sold at their $25,000 face value.

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.

Cash dividends of $11,000 were paid to shareholders.

On November 12, 1,000 shares of common stock were repurchased as treasury stock at a cost of $9,000.

Required:
Prepare the T-accounts for Dux Company.

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