Question

Problem 14-7 Prepare a Statement of Cash Flows (LO14-1, LO14-2] [The following information applies to the questions displayed below.) Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet at December 31 This Year Last Year $ 2 308 157 $ 13 230 195 475 S04 443 426 (70) 356 419 28 35 $ 922 $834 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Long-term investments Total assets 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 $ 302 $225 72 445 368 539 200 121 95 295 $ 922 $834 Weaver Company Income Statement For This Year Ended December 31 Sales Cost of goods sold Gross marain $752 448 304

Answer 1

Solution

Weaver Company
Cash Flow Statement
A. Cash Flows from Operating Activity
Net cash flow from Operating activities		$         121.00
B. Cash flows from Investing Activities
Sale of equipment	$           19.00
Purchase of equipment	$      (108.00)
Sale of Investment	$           12.00
Net cash used in Investing activities		$         (77.00)
C. Cash Flows from Financing activities
Proceeds from issue of Bonds	$           25.00
Purchase of own stock	$         (40.00)
Payment of Dividend	$         (40.00)
Net cash used in Financing Activities		$         (55.00)
Net Increase (Decrease) in Cash [A+B+C]		$         (11.00)
Cash at the beginning of the period		$           13.00
Cash at the end of the period		$             2.00

Working

Weaver Company
Cash Flow Statement
Operating section
A. Cash Flows from Operating Activity
Net Income		$           66.00
Adjustments to reconcile net income to net cash flows from operating activities
Depreciation expense	$           25.00
Loss on sale of Equipment	$             1.00
Gain on sale of Investment	$           (5.00)
Change in Current operating Asset sand Liabilities
Increase in Accounts receivables	$         (78.00)
Decrease in inventory	$           38.00
Increase in prepaid expense	$           (3.00)
Increase in Accounts payable	$           77.00
Decrease in Accrues Liabilities	$           (8.00)
Increase in income tax payable	$             8.00
		$           55.00
Net cash flow from Operating activities		$         121.00