Question

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:

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, 2021, 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 for Dux Company using the indirect method. (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