Required information The comparative balance sheets for 2018 and 2017 and the st
ID: 2531299 • Letter: R
Question
Required information
The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for Dux Company. Additional information from Dux’s accounting records is provided also.
Additional information from the accounting records:
A building that originally cost $56,000, and which was three-fourths depreciated, was sold for $12,000.
The common stock of Byrd Corporation was purchased for $7,000 as a long-term investment.
Property was acquired by issuing a 15%, seven-year, $15,000 note payable to the seller.
New equipment was purchased for $14,000 cash.
On January 1, 2018, bonds were sold at their $25,000 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 $12,000 were paid to shareholders.
On November 12, 1,000 shares of common stock were repurchased as treasury stock at a cost of $12,000.
Required:
Prepare the T-accounts for Dux Company. (Do not round your intermediate calculations. Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)
Comparative Balance Sheets
December 31, 2018 and 2017
($ in 000s) 2018 2017 Assets Cash $ 66 $ 38 Accounts receivable 49 76 Less: Allowance for uncollectible accounts (4 ) (3 ) Dividends receivable 4 3 Inventory 85 80 Long-term investment 51 44 Land 85 70 Buildings and equipment 168 210 Less: Accumulated depreciation (44 ) (80 ) $ 460 $ 438 Liabilities Accounts payable $ 40 $ 59 Salaries payable 3 6 Interest payable 9 3 Income tax payable 9 10 Notes payable 15 0 Bonds payable 80 55 Less: Discount on bonds (2 ) (3 ) Shareholders' Equity Common stock 210 200 Paid-in capital—excess of par 24 20 Retained earnings 83 88 Less: Treasury stock (at cost) (12 ) 0 $ 460 $ 438
Explanation / Answer
Cash Buildings Event Debit Credit Event Event Debit Credit Event 1 12000 7000 2 56000 1 5 25000 14000 4 12000 7 12000 8 Accumulted Depreciation Loss on sale of building Event Debit Credit Date Event Debit Credit Event 1 42000 1 2000 Long-term investment Land Event Debit Credit Event Event Debit Credit Event 2 7000 3 15000 Note Payable Equipmet Event Debit Credit Event Event Debit Credit Event 15000 3 4 14000 Bond Payable Retained Earnings Event Debit Credit Event Event Debit Credit Event 25000 5 6 14000 7 12000 Common Stock Treasury Stock Event Debit Credit Event Event Debit Credit Event 14000 5 8 12000
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