FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for Wright Company. Additional information from Wright's accounting records is provided also.
 

WRIGHT COMPANY
Comparative Balance Sheets
December 31, 2021 and 2020
($ in thousands)
  2021   2020  
Assets                
Cash $ 116     $ 95    
Accounts receivable   136       140    
Short-term investment   47       14    
Inventory   137       135    
Land   102       125    
Buildings and equipment   695       530    
Less: Accumulated depreciation   (193 )     (140 )  
  $ 1,040       899    
Liabilities                
Accounts payable $ 40     $ 48    
Salaries payable   2       6    
Interest payable   8       5    
Income tax payable   5       10    
Notes payable   0       33    
Bonds payable   296       230    
Shareholders’ Equity                
Common stock   390       330    
Paid-in capital—excess of par   187       165    
Retained earnings   112       72    
  $ 1,040     $ 899    
 

 

WRIGHT COMPANY
Income Statement
For Year Ended December 31, 2021
($ in thousands)
Revenues:            
Sales revenue       $ 580  
Expenses:            
Cost of goods sold $ 260        
Salaries expense   59        
Depreciation expense   53        
Interest expense   16        
Loss on sale of land   5        
Income tax expense   87     480  
Net income       $ 100  
 


Additional information from the accounting records:

  1. Land that originally cost $23,000 was sold for $18,000.
  2. The common stock of Microsoft Corporation was purchased for $33,000 as a short-term investment not classified as a cash equivalent.
  3. New equipment was purchased for $165,000 cash.
  4. A $33,000 note was paid at maturity on January 1.
  5. On January 1, 2021, bonds were sold at their $66,000 face value.
  6. Common stock ($60,000 par) was sold for $82,000.
  7. Net income was $100,000 and cash dividends of $60,000 were paid to shareholders.


Required:
Prepare the statement of cash flows of Wright Company for the year ended December 31, 2021. Present cash flows from operating activities by the direct 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).)

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