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 COMPANYComparative Balance SheetsDecember 31, 2016 and 2015($ in 000s) 2016 2015 Assets Cash $ 33 $ 20 Accounts receivable 44 47 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 2016 2015 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 $369 DUX COMPANYIncome StatementFor the Year Ended December 31, 2016($ in 000s) Revenues 2016 2015 ?Sales revenue $200 ?Dividend revenue 3 $203 Expenses ?Cost of goods sold 120 ?Salaries expense 25 ?Depreciation expense 5 ?Interest expense 8 ?Loss on sale of building 3 ?Income tax expense 17 178 Net income $ 25 Additional information from the accounting records: 1.A building that originally cost $40,000, and which was three-fourths depreciated, was sold for $7,000. 2.The common stock of Byrd Corporation was purchased for $5,000 as a long-term investment. 3.Property was acquired by issuing a 13%, seven-year, $30,000 note payable to the seller. 4.New equipment was purchased for $15,000 cash. 5.On January 1, 2016, bonds were sold at their $25,000 face value. 6.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. 7.Cash dividends of $13,000 were paid to shareholders. 8.On November 12, 500 shares of common stock were repurchased as treasury stock at a cost of $8,000.

Required:

Prepare the statement of cash flows of Dux Company for the year ended December 31, 2016. Present cash flows from operating activities by the direct method. (You may omit the schedule to reconcile net income to cash flows from operating activities.)

Answer 1