KU Statement of Cash Flows Indirect Method Exercise
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Problem 21-16 (Algo) Statement of cash flows; indirect method [LO21-4, 21-8]
The comparative balance sheets for 2024 and 2023 and the statement of income for 2024 are given below for Dux Company. Additional information from Dux’s accounting records is provided also.
| DUX COMPANY | ||
| Comparative Balance Sheets | ||
| December 31, 2024 and 2023 | ||
| ($ in thousands) | ||
| 2024 | 2023 | |
|---|---|---|
| Assets | ||
| Cash | $ 123.0 | $ 35.0 |
| Accounts receivable | 63.0 | 65.0 |
| Less: Allowance for uncollectible accounts | (4.0) | (3.0) |
| Dividends receivable | 18.0 | 17.0 |
| Inventory | 70.0 | 65.0 |
| Long-term investment | 30.0 | 25.0 |
| Land | 85.0 | 40.0 |
| Buildings and equipment | 165.0 | 265.0 |
| Less: Accumulated depreciation | (8.0) | (125.0) |
| $ 542.0 | $ 384.0 | |
| Liabilities | ||
| Accounts payable | $ 28.0 | $ 35.0 |
| Salaries payable | 17.0 | 20.0 |
| Interest payable | 19.0 | 17.0 |
| Income tax payable | 22.0 | 23.0 |
| Notes payable | 45.0 | 0 |
| Bonds payable | 92.0 | 52.0 |
| Less: Discount on bonds | (2.0) | (3.0) |
| Shareholders’ Equity | ||
| Common stock | 210.0 | 200.0 |
| Paid-in capital—excess of par | 24.0 | 20.0 |
| Retained earnings | 95.0 | 20.0 |
| Less: Treasury stock | (8.0) | 0 |
| $ 542.0 | $ 384.0 | |
| DUX COMPANY | ||
| Income Statement | ||
| For the Year Ended December 31, 2024 | ||
| ($ in thousands) | ||
| Revenues | ||
|---|---|---|
| Sales revenue | $ 425.0 | |
| Dividend revenue | 18.0 | $ 443.0 |
| Expenses | ||
| Cost of goods sold | 150.0 | |
| Salaries expense | 55.0 | |
| Depreciation expense | 3.0 | |
| Bad debt expense | 1.0 | |
| Interest expense | 38.0 | |
| Loss on sale of building | 33.0 | |
| Income tax expense | 46.0 | 326.0 |
| Net income | $ 117.0 | |
Additional information from the accounting records:
- A building that originally cost $160,000, and which was three-fourths depreciated, was sold for $7,000.
- The common stock of Byrd Corporation was purchased for $5,000 as a long-term investment.
- Property was acquired by issuing a 13%, seven-year, $45,000 note payable to the seller.
- New equipment was purchased for $60,000 cash.
- On January 1, 2024, bonds were sold at their $40,000 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 $28,000 were paid to shareholders.
- On November 12, 12,500 shares of common stock were repurchased as treasury stock at a cost of $8,000.
Required:
Prepare the statement of cash flows for Dux Company using the indirect method.
Note: 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).
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