Comparative financial statements for Weaver Company follow:

Weaver Company Comparative Balance Sheet at December 31
	This Year			Last Year
Assets
Cash and cash equivalents	$	10		$	20
Accounts receivable		590			370
Inventory		170			235
Prepaid expenses		9			7
Total current assets		779			632
Property, plant, and equipment		680			570
Less accumulated depreciation		75			60
Net property, plant, and equipment		605			510
Long-term investments		2			47
Total assets	$	1,386		$	1,189
Liabilities and Stockholders' Equity
Accounts payable	$	390		$	285
Accrued liabilities		35			50
Income taxes payable		84			77
Total current liabilities		509			412
Bonds payable		370			270
Total liabilities		879			682
Common stock		346			450
Retained earnings		161			57
Total stockholders equity		507			507
Total liabilities and stockholders' equity	$	1,386		$	1,189

Weaver Company Income Statement For This Year Ended December 31
Sales					$	870
Cost of goods sold						485
Gross margin						385
Selling and administrative expenses						207
Net operating income						178
Nonoperating items:
Gain on sale of investments	$	3
Loss on sale of equipment		(1	)			2
Income before taxes						180
Income taxes						54
Net income					$	126

During this year, Weaver sold some equipment for $18 that had cost $48 and on which there was accumulated depreciation of $29. In addition, the company sold long-term investments for $48 that had cost $45 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $104 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.

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2

Using the direct method, adjust the companys 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:

• Required 1
• Required 2

• Complete this question by entering your answers in the tabs below.

• Required 1
• Required 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. (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

• Required 1
• Required 2