50.1K

Verified Solution

Link Copied!

The comparative balance sheets for 2016 and 2015 and the statement of income for 2016 are given below for Wright Company. Additional information from Wright's accounting records is provided also.

WRIGHT COMPANY Comparative Balance Sheets December 31, 2016 and 2015 ($ in 000s)
	2016		2015
Assets
Cash	$	103	$	75
Accounts receivable		116		120
Short-term investment		55		26
Inventory		118		115
Land		86		105
Buildings and equipment		630		490
Less: Accumulated depreciation		(169)		(120)
	$	939	$	811
Liabilities
Accounts payable	$	35	$	44
Salaries payable		3		6
Interest payable		8		6
Income tax payable		9		12
Notes payable		0		28
Bonds payable		246		190
Shareholders' Equity
Common stock		330		290
Paid-in capitalexcess of par		173		145
Retained earnings		135		90
	$	939	$	811

WRIGHT COMPANY Income Statement For Year Ended December 31, 2016 ($ in 000s)
Revenues:
Sales revenue			$	520
Expenses:
Cost of goods sold	$	220
Salaries expense		73
Depreciation expense		49
Interest expense		18
Loss on sale of land		4
Income tax expense		66		430
Net income			$	90

Additional information from the accounting records:
a.	Land that originally cost $19,000 was sold for $15,000.
b.	The common stock of Microsoft Corporation was purchased for $29,000 as a short-term investment not classified as a cash equivalent.
c.	New equipment was purchased for $140,000 cash.
d.	A $28,000 note was paid at maturity on January 1.
e.	On January 1, 2016, bonds were sold at their $56,000 face value.
f.	Common stock ($40,000 par) was sold for $68,000.
g.	Net income was $90,000 and cash dividends of $45,000 were paid to shareholders.

Required:

Prepare the statement of cash flows of Wright Company for the year ended December 31, 2016. Present cash flows from operating activities, investing and financing by the direct method

Answer & Explanation Solved by verified expert

See Answer