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 $ 19 530 155 $ 24 340 220 710 650 100 550 588 540 90 450 Less accumulated depreciation Net property, plant, and equipment Long-term investments Total assets $1,269 $1,082 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 $ 360 60 81 501 340 841 254 174 428 $1,269 $ 270 70 74 414 240 654 350 78 428 $1,082 Total liabilities and stockholders equity Weaver Company Income Statement For This Year Ended December 31 $ 840 470 3 70 213 157 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of investments (4) 3_ 160 48 Loss on sale of equipment Income before taxes Income taxes Net income $112 During this year, Weaver sold some equipment for $15 that had cost $45 and on which there was accumulated depreciation of $26. In addition, the company sold long-term investments for $42 that had cost $35 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $96 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 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: 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