Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet at December 31 This Year Last Year Assets Cash $ 19 $ 33 Accounts payable Accrued liabilities Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Long-term investments Total assets Liabilities and Stockholders' Equity Income taxes payable 730 440 205 270 10 8 964 751 750 640 120 70 630 570 -2 54 $ 1,592 $ 1,375 $ 460 $ 320 60 70 91 84 Total current liabilities. 611 474 Bonds payable 420 340 Total liabilities 1,031 814 Common stock 360 500 Retained earnings 201 61 Total stockholders' equity 561 561 Total liabilities and stockholders' equity $ 1,592 $ 1,375 Sales Weaver Company Income Statement For This Year Ended December 31 Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of investments Loss on sale of equipment Income before taxes Income taxes Net income $ 940 520 420 203 217 $ 6 (3) 3 220 66 $ 154 During this year, Weaver sold some equipment for $16 that had cost $55 and on which there was accumulated depreciation of $36. Int addition, the company sold long-term investments for $62 that had cost $56 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $140 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 0 $ 0 0 0 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. (Cash outflows and amounts to be deducted should be indicated with a minus sign.) 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 Investing activities: Financing activities: Beginning cash and cash equivalents Ending cash and cash equivalents $ + 0 0 0 0 0 0