Reference no: EM132506627

The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for Wright Company. Additional information from Wright's accounting records is provided also.

WRIGHT COMPANY

Comparative Balance Sheets

December 31, 2018 and 2017

($ in 000s)                         2018                        2017

Assets Cash                        $96                $80

Accounts receivable              122                 125

Short-term investment              58                28

Inventory                                    124          120

Land                                        90               110

Buildings and equipment            645                  500

Less: Accumulated depreciation  (175)           (125)

                                              $960             838

Liabilities Accounts payable         $37              $45

Salaries payable                          4             6

Interest payable                           7                  4

Income tax payable                         8                  13

Notes payable                                  0                     29

Bonds payable                                 258                      200

Shareholders' Equity Common stock        345                      300

Paid-in capital-excess of par                  170                      150

Retained earnings                               131                       91

                                                          $960                 $838

WRIGHT COMPANY

Income Statement

For Year Ended December 31, 2018

($ in 000s)Revenues: Sales revenue $560

Expenses: Cost of goods sold$230

Salaries expense 98

Depreciation expense 50

Interest expense 19

Loss on sale of land 5

Income tax expense 68 470

Net income $90

Additional information from the accounting records:

1. Land that originally cost $20,000 was sold for $15,000.
2. The common stock of Microsoft Corporation was purchased for $30,000 as a short-term investment not classified as a cash equivalent.
3. New equipment was purchased for $145,000 cash.
4. A $29,000 note was paid at maturity on January 1.
5. On January 1, 2018, bonds were sold at their $58,000 face value.
6. Common stock ($45,000 par) was sold for $65,000.
7. Net income was $90,000 and cash dividends of $50,000 were paid to shareholders.

Required:

Question 1: Prepare the statement of cash flows of Wright Company for the year ended December 31, 2018. 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., 5,000 should be entered as 5).)