Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet at December 31 This Year Last Year Assets Cash and cash equivalents Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment $6 $ 11 210 155 4 380 410 60 350 31 270 105 6 387 520 95 425 26 $ 838 Less accumulated depreciation Net property, plant, and equipment Long-term investments Total assets 761 Liabilities and Stockholders' Equity Accounts payable Accrued 1labilities Income taxes payable Total current l1abilities Bonds payable Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 205 60 61 326 110 $ 230 45 73 348 165 513 254 71 325 436 300 25 325 $ 838$761 Weaver Company Income Statement For This Year Ended December 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: $710 405 305 228 $11 Gain on sale of investments Loss on sale of equipment Income before taxes Income taxes Net income (8)3 80 24 $ 56 During this year, Weaver sold some equipment for $11 that had cost $32 and on which there was accumulated depreciation of $13. In addition, the company sold long-term investments for $16 that had cost $5 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $46 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 Required 1 Required 2 Using the direct method, adjust the company's income statement for this year to a cash basis. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) Weaver Company Direct Method of Determining the Net Cash Flows from Operating Activities Adjustments to a cash basis: Adjustments to a cash basis Selling and administrative expenses Adjustments to a cash basis: Income taxes Adjustments to a cash basis: 0 Weaver Company Statement of Cash Flows For This Year Ended December 31 Operating activities: Cash received from customers Less cash disbursements for: Total cash disbursements 0 0 Investing activities: Financing activities: 0 Beginning cash and cash equivalents Ending cash and cash equivalents 0