Question

Required information

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	$	66			$	38
Accounts receivable		49				76
Less: Allowance for uncollectible accounts		(4	)			(3	)
Dividends receivable		4				3
Inventory		85				80
Long-term investment		51				44
Land		85				70
Buildings and equipment		168				210
Less: Accumulated depreciation		(44	)			(80	)
	$	460			$	438
Liabilities
Accounts payable	$	40			$	59
Salaries payable		3				6
Interest payable		9				3
Income tax payable		9				10
Notes payable		15				0
Bonds payable		80				55
Less: Discount on bonds		(2	)			(3	)
Shareholders' Equity
Common stock		210				200
Paid-in capital—excess of par		24				20
Retained earnings		83				88
Less: Treasury stock (at cost)		(12	)			0
	$	460			$	438

DUX COMPANY Income Statement For the Year Ended December 31, 2018 ($ in 000s)
Revenues
Sales revenue	$	340
Dividend revenue		4		$	344
Expenses
Cost of goods sold	$	230
Salaries expense		32
Depreciation expense		6
Bad debt expense		1
Interest expense		9
Loss on sale of building		2
Income tax expense	$	42			322
Net income				$	22

Additional information from the accounting records:

A building that originally cost $56,000, and which was three-fourths depreciated, was sold for $12,000.

The common stock of Byrd Corporation was purchased for $7,000 as a long-term investment.

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

New equipment was purchased for $14,000 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 $12,000 were paid to shareholders.

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

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

		Building& Euipment
Opening		210
			Building sale		56
Equipment purchase		14
			Closing Balance		168
Total		224	Total		224

		Accumulated Depreciation - Building
			Opening		80
Building sale		42
			Depreciation		6
Closing Balance		44
Total		86	Total		86
		Land
Opening		70
Purchase of land		15
			Closing Balance		85
Total		85	Total		85
		Long term Investment
Opening		44
Purchases		7
			Closing Balance		51
Total		51	Total		51

		Bonds Payable
			Opening		55
			Sale of bonds		25
Closing Balance		80
Total		80	Total		80
		Paid in Capital in excess of par
			Opening		20
			Issues		4
			(1000*4)
Closing Balance		24
Total		24	Total		24
		Common Stock
			Opening		200
			Issues		10
			(1000*10)
Closing Balance		210
Total		210	Total		210