You're evaluating a new electron microscope for the QA (quality assurance) unit. The microscope will cost $19,000 to buy and another $2,000 to install, and will be sold for $1,800 after 3 years. It falls into the 3-year MACRS class, with depreciation rates as follows:
| Year | 1 | 2 | 3 | 4 |
| Depreciation rate | 33% | 45% | 15% | 7% |
The microscope will require an inventory of spare parts worth $5,000. The equipment will not increase revenue, but will save the company $10,000 in labor costs each year.
Your company's marginal tax rate (federal plus state) is 34% and its weighted average cost of capital is 8%.
What is the initial (year-0) free cash flow from the project? Choose the right sign.
What is the free cash flow in year 1?
What is the free cash flow in year 2?
What is the after-tax salvage value of the equipment at the end
of year 3?
What is the free cash flow in year 3?
What is the NPV of this project?
In: Finance
The comparative balance sheets for 2021 and 2020 and the
statement of income for 2021 are given below for Dux Company.
Additional information from Dux’s accounting records is provided
also.
| DUX COMPANY Comparative Balance Sheets December 31, 2021 and 2020 ($ in thousands) |
||||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Cash | $ | 33 | $ | 20 | ||||
| Accounts receivable | 48 | 50 | ||||||
| Less: Allowance for uncollectible accounts | (4 | ) | (3 | ) | ||||
| Dividends receivable | 3 | 2 | ||||||
| Inventory | 55 | 50 | ||||||
| Long-term investment | 15 | 10 | ||||||
| Land | 70 | 40 | ||||||
| Buildings and equipment | 225 | 250 | ||||||
| Less: Accumulated depreciation | (25 | ) | (50 | ) | ||||
| $ | 420 | $ | 369 | |||||
| Liabilities | ||||||||
| Accounts payable | $ | 13 | $ | 20 | ||||
| Salaries payable | 2 | 5 | ||||||
| Interest payable | 4 | 2 | ||||||
| Income tax payable | 7 | 8 | ||||||
| Notes payable | 30 | 0 | ||||||
| Bonds payable | 95 | 70 | ||||||
| Less: Discount on bonds | (2 | ) | (3 | ) | ||||
| Shareholders' Equity | ||||||||
| Common stock | 210 | 200 | ||||||
| Paid-in capital—excess of par | 24 | 20 | ||||||
| Retained earnings | 45 | 47 | ||||||
| Less: Treasury stock | (8 | ) | 0 | |||||
| $ | 420 | $ | 369 | |||||
| DUX COMPANY Income Statement For the Year Ended December 31, 2021 ($ in thousands) |
||||||
| Revenues | ||||||
| Sales revenue | $ | 200 | ||||
| Dividend revenue | 3 | $ | 203 | |||
| Expenses | ||||||
| Cost of goods sold | 120 | |||||
| Salaries expense | 25 | |||||
| Depreciation expense | 5 | |||||
| Bad debt expense | 1 | |||||
| Interest expense | 8 | |||||
| Loss on sale of building | 3 | |||||
| Income tax expense | 16 | 178 | ||||
| Net income | $ | 25 | ||||
Additional information from the accounting records:
Required:
Prepare the statement of cash flows of Dux Company for the year
ended December 31, 2021. Present cash flows from operating
activities by the direct method. (Do not round your
intermediate calculations. Enter your answers in thousands (i.e.,
10,000 should be entered as 10). Amounts to be deducted should be
indicated with a minus sign.)
In: Accounting
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 $12,000.
Prepare the statement of cash flows for Dux Company. Use the T-account method to assist in your analysis. (Do not round your intermediate calculations. Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)
In: Accounting
The comparative balance sheets for 2018 and 2017 and the
statement of income for 2018 are given below for Dux Company.
Additional information from Dux’s accounting records is provided
also.
|
DUX COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ 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 $12,000.
Required:
Prepare the T-accounts for Dux Company. (Do not round your
intermediate calculations. Enter your answers in
thousands. Amounts to be deducted should be
indicated with a minus sign.)
In: Accounting
Required information
The comparative balance sheets for 2018 and 2017 and the
statement of income for 2018 are given below for Dux Company.
Additional information from Dux’s accounting records is provided
also.
|
DUX COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ 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 $12,000.
Required:
Prepare the T-accounts for Dux Company. (Do not round your
intermediate calculations. Enter your answers in
thousands. Amounts to be deducted should be
indicated with a minus sign.)
In: Accounting
Required information
The comparative balance sheets for 2018 and 2017 and the
statement of income for 2018 are given below for Dux Company.
Additional information from Dux’s accounting records is provided
also.
|
DUX COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ 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 $12,000.
Prepare the statement of cash flows for Dux Company. Use the T-account method to assist in your analysis. (Do not round your intermediate calculations. Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)
In: Accounting
Required information
The comparative balance sheets for 2018 and 2017 and the
statement of income for 2018 are given below for Dux Company.
Additional information from Dux’s accounting records is provided
also.
|
DUX COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ 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 $12,000.
Required:
Prepare the T-accounts for Dux Company. (Do not round your
intermediate calculations. Enter your answers in
thousands. Amounts to be deducted should be
indicated with a minus sign.)
In: Accounting
Required information
The comparative balance sheets for 2018 and 2017 and the
statement of income for 2018 are given below for Dux Company.
Additional information from Dux’s accounting records is provided
also.
|
DUX COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ 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 $12,000.
Prepare the statement of cash flows for Dux Company. Use the
T-account method to assist in your analysis. (Do not round
your intermediate calculations. Enter your answers in thousands.
Amounts to be deducted should be indicated with a minus
sign.)
In: Accounting
Required information
The comparative balance sheets for 2018 and 2017 and the
statement of income for 2018 are given below for Dux Company.
Additional information from Dux’s accounting records is provided
also.
|
DUX COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ 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 $12,000.
Required:
Prepare the T-accounts for Dux Company. (Do not round your
intermediate calculations. Enter your answers in
thousands. Amounts to be deducted should be
indicated with a minus sign.)
In: Accounting
Required information
The comparative balance sheets for 2018 and 2017 and the
statement of income for 2018 are given below for Dux Company.
Additional information from Dux’s accounting records is provided
also.
|
DUX COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ 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.
Prepare the statement of cash flows for Dux Company. Use the
T-account method to assist in your analysis. (Do not round
your intermediate calculations. Enter your answers in thousands.
Amounts to be deducted should be indicated with a minus
sign.)
In: Accounting