Question

The comparative balance sheets for 2016 and 2015 and the statement of income for 2016 are given below for Dux Company. Additional information from Dux’s accounting records is provided also.

DUX COMPANY Comparative Balance Sheets December 31, 2016 and 2015 ($ in 000s)
		2016		2015
Assets
Cash	$	63	$	35
Accounts receivable		59		77
Dividends receivable		2		1
Inventory		85		65
Long-term investment		45		25
Land		136		71
Buildings and equipment		210		280
Less: Accumulated depreciation		(40)		(80)
	$	560	$	474
Liabilities
Accounts payable	$	28	$	50
Salaries payable		2		7
Interest payable		4		3
Income tax payable		22		23
Notes payable		65		0
Bonds payable		125		85
Less: Discount on bonds		(17)		(33)
Shareholders' Equity
Common stock		225		215
Paid-in capital—excess of par		37		35
Retained earnings		92		89
Less: Treasury stock		(23)		0
	$	560	$	474

DUX COMPANY Income Statement For Year Ended December 31, 2016 ($ in 000s)
Revenues
Sales revenue	$	333
Dividend revenue		6	$	339
Expenses
Cost of goods sold		135
Salaries expense		40
Depreciation expense		35
Interest expense		23
Loss on sale of building		4
Income tax expense		32		269
Net income			$	70

Additional information from the accounting records:

a.	A building that originally cost $100,000, and which was three-fourths depreciated, was sold for $21,000.
b.	The common stock of Byrd Corporation was purchased for $20,000 as a long-term investment.
c.	Property was acquired by issuing a 14%, seven-year, $65,000 note payable to the seller.
d.	New equipment was purchased for $30,000 cash.
e.	On January 1, 2016, $40,000 of bonds were sold at face value.
f.	On January 19, Dux issued a 4% stock dividend (1,000 shares). The market price of the $10 par value common stock was $12 per share at that time.
g.	Cash dividends of $55,000 were paid to shareholders.
h.	On November 46,000 shares of common stock were repurchased as treasury stock at a cost of $23,000.

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).))

Answer 1

Statement of Cashflows for Dux company for the year ended 2016

Cashflows from operating activities $000 $000

Adjustments:

Depreciation 35

Loss on Disposal 4

_______

Operating profit before working capital changes 39

Increase in Inventory -20

Decrease in Receivables 18

Decrease in Payables -22

_________

Cash generated from operations 15

Interest paid -23

Tax paid -32

__________

Net Cash from operating activities -40

Cashflows from investing activties

Purchase of equipment -30

Purchase of long term investment -20

Proceeds from sale of property 21

__________

Net activities from investing activities -29

Cashflows from financing activities

Proceeds from issue of bonds 40

Proceeds from issue of ordinary shares 12

Dividends paid -55

Treasury Stock -23

_________

Net Cash from financing activities -26

_________

Net cash increase in Cash and equivalents 28

Cash and equivalents at the beggining 35

_______

Cash and equivalents at the end of the period 63