Question
Please show work. Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Assets Cash $
Please show work.
Comparative financial statements for Weaver Company follow: |
Weaver Company Comparative Balance Sheet December 31, 2014 and 2013 | ||||
2014 | 2013 | |||
Assets | ||||
Cash | $ | 4 | $ | 10 |
Accounts receivable | 250 | 200 | ||
Inventory | 100 | 150 | ||
Prepaid expenses | 5 | 3 | ||
Total current assets | 359 | 363 | ||
Property, plant, and equipment | 510 | 400 | ||
Less accumulated depreciation | 90 | 50 | ||
Net property, plant, and equipment | 420 | 350 | ||
Long-term investments | 26 | 30 | ||
Total assets | $ | 805 | $ | 743 |
Liabilities and Stockholders' Equity | ||||
Accounts payable | $ | 220 | $ | 200 |
Accrued liabilities | 35 | 50 | ||
Income taxes payable | 72 | 60 | ||
Total current liabilities | 327 | 310 | ||
Bonds payable | 145 | 100 | ||
Total liabilities | 472 | 410 | ||
Common stock | 265 | 300 | ||
Retained earnings | 68 | 33 | ||
Total stockholders equity | 333 | 333 | ||
Total liabilities and stockholders' equity | $ | 805 | $ | 743 |
Weaver Company Income Statement For the Year Ended December 31, 2014 | ||||
Sales | $ | 700 | ||
Cost of goods sold | 400 | |||
Gross margin | 300 | |||
Selling and administrative expenses | 231 | |||
Net operating income | 69 | |||
Nonoperating items: | ||||
Gain on sale of investments | $ | 10 | ||
Loss on sale of equipment | (9) | 1 | ||
Income before taxes | 70 | |||
Income taxes | 21 | |||
Net income | $ | 49 | ||
During 2014, Weaver sold some equipment for $10 that had cost $31 and on which there was accumulated depreciation of $12. In addition, the company sold long-term investments for $14 that had cost $4 when purchased several years ago. A cash dividend was paid during 2014 and the company repurchased $35 of its own stock. Weaver did not retire any bonds during 2014. |
Required: | |
1. | Using the direct method, adjust the companys income statement for 2014 to a cash basis.(Adjustment amounts that are to be deducted should be indicated with a minus sign.) |
2. | Using the information in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for 2014. (Cash outflows and amounts to be deducted should be indicated with a minus si
gn.)
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