Question

Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet at December 31 This Year Last Year Assets Cash $ $ 15 19 430 290 Accounts receivable Inventory 150 195 Prepaid expenses 7 Total current assets 602 509 Property, plant, and equipment Less accumulated depreciation 490 600 105 40 Net property, plant, and equipment 495 450 Long-term investments 18 39 $1,115 $ 998 Total assets Liabilities and Stockholders' Equity Accounts payable $ $ 310 245 Accrued liabilities 65 80 Income taxes payable 76 69 Total current liabilities 451 394 Bonds payable 250 190 Total liabilities 701 584 Common stock 338 400 Retained earnings 76 14 Total stockholders' equity 414 414 Total liabilities and stockholders' equity $1,115 $ 998 Weaver Company Income Statement For This Year Ended December 31 Sales $790 445 Cost of goods sold Gross margin Selling and administrative expenses 345 227 Net operating income Nonoperating items: 118 $ 11 (9) Gain on sale of investments Loss on sale of equipment 2 Income before taxes 120 36 Income taxes $ 84 Net income =3

Answer 1

Weaver Company Cashflow Statement Direct method Calculation Cash flows from from Operating Activities Sales 790 Adjustments to a cash basis Opening Accounts Receivable 290 closing Accounts Receivable (430) Cash collections from customers 650 Cash payments Cost of goods sold 44 Adjustments to a cash basis Opening Accounts Payable 245 Closing Accounts Payable (310) closing Inventory 150 (195) Opening Inventory Cash paid to Suppliers 335 Selling & Admin expenses Adjustments to a cash basis 227 Opening Accrued Liabilties 80 Closing Accrued Liabilties Closing Prepaid Expenses (65) 7 Opening Prepaid Expenses (5) (86) Depreciation expense 40-21-105 Open bal-Sales-Clsg bal=Dep exp Cash paid for Selling & admin expenses 158 Income tax expense 36 Adjustments to a cash basis Opening Income taxes payable 69 (76) closing Income taxes payable Cash paid for income tax expense 29 522 Net Cash Provided/(Used) by Operating Activities 128

Weaver Company Cashflow Statement - Direct method Calculation Cash flows from from Operating Activities Cash received from customers 650 Less Cash disbursements for Cash paid to suppliers for Inventory 335 Cash paid for selling & admin expenses 158 Cash paid for Income taxes 29 Total cash disbursements 522 Net Cash Provided/(Used) by Operating Activities 128 Cash flows from from Investing Activities Proceeds from sale of equipment 10 Proceeds from sale of long term investments Purchase of Equipment 32 (150) 490-40-600 Open bal Sales Clsg bal Net Cash Provided/(Used) by Investing Activities (108) Cash flows from from Financing Activities Proceeds from issue of Bonds 60 -250-190 Repurchase of treaury stock Dividends paid (62) (22) =76-84-14 Clsg RE - Net income Open RE Net Cash Provided/(Used) by Financing Activities Net Change in Cash Cash at Beginning of Period (24) (4) 19 Cash at End of Period 15