Question

at December 31 This Year Last Year $ $ 4 370 125 503 579 16 260 180 2 458 460 70 390 36 884 490 $1,016 $ 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 $ 230 50 66 280 40 73 393 245 638 225 153 346 160 506 300 78 378 884 378 $1,016 $ $ 760 430 330 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: Gain on sale of investments Loss on sale of equipment Income before taxes Income taxes Net income $ 13 (3) 39 $ 91 During this year, Weaver sold some equipment for $16 that had cost $37 and on which there was accumulated depreciation of $18. In addition, the company sold long-term investments for $26 that had cost $13 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $75 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.

Please solve for Required 1 and 2 in images. Blank answer images provided for formatting. Note Required 1 says to use the direct method.

Answer 1

Weaver Company Cashflow Statement - Direct method Calculation Cash flows from from Operating Activities Sales 760 Adjustments to a cash basis Opening Accounts Receivable Closing Accounts Receivable Cash collections from customers 260 (370) 650 430 Cash payments Cost of goods sold Adjustments to a cash basis Opening Accounts Payable Closing Accounts Payable Closing Inventory Opening Inventory Cash paid to Suppliers 230 (280) 125 (180) 325 210 Selling & Admin expenses Adjustments to a cash basis Opening Accrued Liabilties Closing Accrued Liabilties Closing Prepaid Expenses Opening Prepaid Expenses Depreciation expense Cash paid for Selling & admin expenses =70-18-80 Open bal-Sales-Clsg bal=Dep exp 194 Income tax expense Adjustments to a cash basis Opening Income taxes payable Closing Income taxes payable Cash paid for income tax expense 551 99 Net Cash Provided/(Used) by Operating Activities

Weaver Company Cashflow Statement - Direct method Calculation 650 Operating Activities Cash received from customers Less Cash disbursements for Cash paid to suppliers for Inventory Cash paid for selling & admin expenses Cash paid for Income taxes Total cash disbursements Net Cash Provided/(Used) by Operating Activities 325 194 32 551 99 16 Investing Activities Proceeds from sale of equipment Proceeds from sale of long term investments Purchase of Equipment Net Cash Provided/(Used) by Investing Activities (147) -460-37-570 Open bal - Sales - Clsg bal (105) =245-160 85 (75) (16) =153-91-78 Clsg RE - Net income - Open RE Financing Activities Proceeds from issue of Bonds Repurchase of common stock Dividends paid Net Cash Provided/(Used) by Financing Activities Net Change in Cash Cash at Beginning of Period Cash at End of Period (6) (12) 16