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	$	125			$	110
Accounts receivable		151				155
Short-term investment		56				20
Inventory		155				150
Land		114				140
Buildings and equipment		740				560
Less: Accumulated depreciation		(211	)			(155	)
	$	1,130				980
Liabilities
Accounts payable	$	46			$	51
Salaries payable		4				7
Interest payable		5				4
Income tax payable		9				13
Notes payable		0				36
Bonds payable		332				260
Shareholders' Equity
Common stock		435				360
Paid-in capital?excess of par		200				180
Retained earnings		99				69
	$	1,130			$	980

WRIGHT COMPANY Income Statement For Year Ended December 31, 2021 ($ in thousands)
Revenues:
Sales revenue				$	640
Expenses:
Cost of goods sold	$	290
Salaries expense		95
Depreciation expense		56
Interest expense		19
Loss on sale of land		4
Income tax expense		96			560
Net income				$	80

Additional information from the accounting records:

1. Land that originally cost $26,000 was sold for $22,000.
2. The common stock of Microsoft Corporation was purchased for $36,000 as a short-term investment not classified as a cash equivalent.
3. New equipment was purchased for $180,000 cash.
4. A $36,000 note was paid at maturity on January 1.
5. On January 1, 2021, bonds were sold at their $72,000 face value.
6. Common stock ($75,000 par) was sold for $95,000.
7. Net income was $80,000 and cash dividends of $50,000 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).)

Transcribed Image Text:

Casn inflows: From customers Cash outflows: To suppliers of goods To employees For income taxes For interest Net cash flows from operating activities. Cash flows from investing activities: Purchase of short-term investment Purchase of equipment Sale of land Net cash flows from investing activities Cash flows from financing activities: Sale of bonds payable Sale of common stock Payment of dividends Repayment of notes payable Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 31 644 $ 644 0 0 Casn inflows: From customers Cash outflows: To suppliers of goods To employees For income taxes For interest Net cash flows from operating activities. Cash flows from investing activities: Purchase of short-term investment Purchase of equipment Sale of land Net cash flows from investing activities Cash flows from financing activities: Sale of bonds payable Sale of common stock Payment of dividends Repayment of notes payable Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 31 644 $ 644 0 0

Answer rating: 100% (QA)

Cash receipts from customers 640000 Cost of goods sold 290000 Salaries expense 95000 Income tax expe... View the full answer