Comparative financial statements for Weaver Company follow Weaver Company Comparative Balance Sheet at December 31 This Year Last Year Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment 310 105 13 230 165 431 540 Less accumulated depreciation Net property, plant, and equipment Long-term investments Total assets 414 430 40 390 485 28 944 $837 Liabilities and Stockholders' Equity Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Common stock Retained earnings Total stockholders' equity 250 65 70 385 210 595 226 123 349 944 215 80 63 358 130 488 300 49 349 $ 837 Total liabilities and stockholders' equity During this year, Weaver sold some equipment for $13 that had cost $34 and on which there was accumulated depreciation of $15. In addition, the company sold long-term investments for $20 that had cost $5 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $74 of its own stock. This year Weaver did not retire any bonds. Required 1. Using the direct method, adjust the company's income statement for this year to a cash basis. 2. Using the information obtained in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for this year Using the direct method, adjust the company's income statement for this year to a cash basis to be deducted should be indicated with a minus sign.) . (Adjustment amounts that are Weaver Company Direct Method of Determining the Net Cash flows from Operating activities Sales Adjustments to a cash basis: Increase in accounts receivable Cost of goods sold Adjustments to a cash basis: Increase in accounts payable Decrease in inventory Selling and administrative expenses Adjustments to a cash basis: Increase in prepaid expenses Decrease in accrued liabilities Depreciation Income taxes Adjustments to a cash basis: Increase in income taxes payable Net cash provided by operating activities Required 2 > Weaver Company Statement of Cash Flows For This Year Ended December 31 Operating activities: Cash received from customers Less cash disbursements for Income taxes Selling and administrative expenses Cost of merchandise purchased Total cash disbursements Net cash provided by operating activities Investing activities: Additions to property, plant and equipment Proceeds from sale of equipment Proceeds from sale of long-term investments 0 Net cash used for investing activities Financing activities: Cash dividends paid Repurchase of common stock Issuance of bonds payable Net decrease in cash Beginning cash and cash equivalents Ending cash and cash equivalents Comparative financial statements for Weaver Company follow Weaver Company Comparative Balance Sheet at December 31 This Year Last Year Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment 310 105 13 230 165 431 540 Less accumulated depreciation Net property, plant, and equipment Long-term investments Total assets 414 430 40 390 485 28 944 $837 Liabilities and Stockholders' Equity Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Common stock Retained earnings Total stockholders' equity 250 65 70 385 210 595 226 123 349 944 215 80 63 358 130 488 300 49 349 $ 837 Total liabilities and stockholders' equity During this year, Weaver sold some equipment for $13 that had cost $34 and on which there was accumulated depreciation of $15. In addition, the company sold long-term investments for $20 that had cost $5 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $74 of its own stock. This year Weaver did not retire any bonds. Required 1. Using the direct method, adjust the company's income statement for this year to a cash basis. 2. Using the information obtained in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for this year Using the direct method, adjust the company's income statement for this year to a cash basis to be deducted should be indicated with a minus sign.) . (Adjustment amounts that are Weaver Company Direct Method of Determining the Net Cash flows from Operating activities Sales Adjustments to a cash basis: Increase in accounts receivable Cost of goods sold Adjustments to a cash basis: Increase in accounts payable Decrease in inventory Selling and administrative expenses Adjustments to a cash basis: Increase in prepaid expenses Decrease in accrued liabilities Depreciation Income taxes Adjustments to a cash basis: Increase in income taxes payable Net cash provided by operating activities Required 2 > Weaver Company Statement of Cash Flows For This Year Ended December 31 Operating activities: Cash received from customers Less cash disbursements for Income taxes Selling and administrative expenses Cost of merchandise purchased Total cash disbursements Net cash provided by operating activities Investing activities: Additions to property, plant and equipment Proceeds from sale of equipment Proceeds from sale of long-term investments 0 Net cash used for investing activities Financing activities: Cash dividends paid Repurchase of common stock Issuance of bonds payable Net decrease in cash Beginning cash and cash equivalents Ending cash and cash equivalents
