Comparative financial statements for Weaver Company follow:

Weaver Company Comparative Balance Sheet at December 31
	This Year			Last Year
Assets
Cash and cash equivalents	$	3		$	14
Accounts receivable		330			240
Inventory		110			170
Prepaid expenses		9			7
Total current assets		452			431
Property, plant, and equipment		550			440
Less accumulated depreciation		60			50
Net property, plant, and equipment		490			390
Long-term investments		25			34
Total assets	$	967		$	855
Liabilities and Stockholders' Equity
Accounts payable	$	260		$	220
Accrued liabilities		80			90
Income taxes payable		71			64
Total current liabilities		411			374
Bonds payable		215			140
Total liabilities		626			514
Common stock		235			300
Retained earnings		106			41
Total stockholders equity		341			341
Total liabilities and stockholders' equity	$	967		$	855

Weaver Company Income Statement For This Year Ended December 31
Sales					$	740
Cost of goods sold						420
Gross margin						320
Selling and administrative expenses						218
Net operating income						102
Nonoperating items:
Gain on sale of investments	$	13
Loss on sale of equipment		(5	)			8
Income before taxes						110
Income taxes						33
Net income					$	77

During this year, Weaver sold some equipment for $14 that had cost $35 and on which there was accumulated depreciation of $16. In addition, the company sold long-term investments for $22 that had cost $9 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $65 of its own stock. This year Weaver did not retire any bonds.

Required:

1. Using the direct method, adjust the companys 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.