Question
Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Assets Cash $ 9 $ 21
Comparative financial statements for Weaver Company follow:
Weaver Company Comparative Balance Sheet December 31, 2014 and 2013 | ||||
2014 | 2013 | |||
Assets | ||||
Cash | $ | 9 | $ | 21 |
Accounts receivable | 610 | 380 | ||
Inventory | 175 | 240 | ||
Prepaid expenses | 10 | 8 | ||
Total current assets | 804 | 649 | ||
Property, plant, and equipment | 690 | 580 | ||
Less accumulated depreciation | 80 | 70 | ||
Net property, plant, and equipment | 610 | 510 | ||
Long-term investments | 10 | 48 | ||
Total assets | $ | 1,424 | $ | 1,207 |
Liabilities and Stockholders' Equity | ||||
Accounts payable | $ | 400 | $ | 290 |
Accrued liabilities | 50 | 60 | ||
Income taxes payable | 85 | 78 | ||
Total current liabilities | 535 | 428 | ||
Bonds payable | 390 | 280 | ||
Total liabilities | 925 | 708 | ||
Common stock | 341 | 450 | ||
Retained earnings | 158 | 49 | ||
Total stockholders equity | 499 | 499 | ||
Total liabilities and stockholders' equity | $ | 1,424 | $ | 1,207 |
Weaver Company Income Statement For the Year Ended December 31, 2014 | ||||
Sales | $ | 880 | ||
Cost of goods sold | 490 | |||
Gross margin | 390 | |||
Selling and administrative expenses | 203 | |||
Net operating income | 187 | |||
Nonoperating items: | ||||
Gain on sale of investments | $ | 12 | ||
Loss on sale of equipment | (9) | 3 | ||
Income before taxes | 190 | |||
Income taxes | 57 | |||
Net income | $ | 133 | ||
During 2014, Weaver sold some equipment for $10 that had cost $49 and on which there was accumulated depreciation of $30. In addition, the company sold long-term investments for $50 that had cost $38 when purchased several years ago. A cash dividend was paid during 2014 and the company repurchased $109 of its own stock. Weaver did not retire any bonds during 2014. |
Required: | |
1. | Using the direct method, adjust the companys income statement for 2014 to a cash basis. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) |
2. | Using the information in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for 2014. (Cash outflows and amounts to be deducted should be indicated with a minus sign.) |
E1 810 Leng-erm se otal asat Far the Year Ended Oacomber 31, 2014 Gelirg and nominieatie
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