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Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet at December 31 This Year Last Year $ $ 7 450 155 8
Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet at December 31 This Year Last Year $ $ 7 450 155 8 620 610 110 500 18 20 300 200 6 526 500 50 450 40 $1,138 $1,016 Assets Cash 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 Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 320 80 77 477 255 732 297 109 406 $1,138 250 90 70 410 200 610 350 56 406 $1,016 $ 800 450 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: Gain on sale of investments $ 12 Loss on sale of equipment (8) Income before taxes Income taxes Net income 350 244 106 4 110 33 $ 77 During this year, Weaver sold some equipment for $11 that had cost $41 and on which there was accumulated depreciation of $22. In addition, the company sold long-term investments for $34 that had cost $22 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $53 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
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