Question

This Year "Last Year 13 650 $ 29 4ee 250 .243 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 388 98 38 760 $ 900 See 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 During this year. Weaver sold some equipment for $12 that had cost $51 and on which there was accumulated depreciation of $32. In addition, the company sold long-term Investments for $54 that had cost $44 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $112 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using the direct method, adjust the company's income statement for this year to a cash basis. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) Weaver Company Direct Method of Determining the Net Cash flows from Operating activities Adjustments to a cash basis: Adjustments to a cash basis: Seling and administrative expenses Adjustments to a cash basis: Income taxes Adjustments to a cash basis:

Answer 1

Weaver Company Cashflow Statement - Direct method Calculation Cash flows from from Operating Activities Sales 900 Adjustments to a cash basis Opening Accounts Receivable Closing Accounts Receivable Cash collections from customers 400 (650) 650 500 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 300 (420) 185 (250) 315 203 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 (42) =90-32-100 173 Open bal-Sales-Clsg bal=Dep exp Income tax expense Adjustments to a cash basis Opening Income taxes payable Closing Income taxes payable Cash paid for income tax expense Net Cash Provided/(Used) by Operating Activities (87) 53 109

Weaver Company Cashflow Statement - Direct method Calculation 650 Cash flows from from Operating Activities Cash collections from customers Less Cash disbursements 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 315 173 53 541 109 Cash flows from from Investing Activities Proceeds from sale of equipment Proceeds from sale of long term investments Purchase of Equipment Net Cash Provided/(Used) by Investing Activities 12 54 (161) =600-51-710 (95) Open bal - Sales - Clsg bal Cash flows from from Financing Activities Proceeds from issue of Bonds Repurchase of treaury stock Dividends paid Net Cash Provided/(Used) by Financing Activities 110 -410-300 (112) (28) =195-140-83 (30) Clsg RE - Net income - Open RE (16) Net Change in Cash Cash at Beginning of Period Cash at End of Period 13