Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet at December 31 This Year Last Year Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment $ 13 650 185 $ 29 400 250 Less accumulated depreciation Net property, plant, and equipment Long-term investments Total assets 854 710 100 610 6 683 600 90 510 50 $1,243 $1,470 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 420 70 87 577 410 987 288 195 483 $ 300 80 80 460 300 760 400 83 483 $1,243 $1,470 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: $900 500 400 203 197 Gain on sale of investments $10 Loss on sale of equipment Income before taxes Income taxes Net income (7 3 200 60 $140 During this year, Weaver sold some equipment for $12 that had cost $51 and on which there was accumulated depreciation of $32. In addition, the company sold long-term investments for $54 that had cost $44 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $112 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 1Required 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: 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 h and raeh an
