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Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet at December 31 This Year Last Year Assets Cash $ 10 $ 20

Comparative financial statements for Weaver Company follow:

Weaver Company Comparative Balance Sheet at December 31
This Year Last Year
Assets
Cash $ 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.

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Part 2

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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

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