During 2014. Weaver sold some equipment for $18 that had cost $31 and on which t
ID: 2456361 • Letter: D
Question
During 2014. Weaver sold some equipment for $18 that had cost $31 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $12 that had cost $6 v/hen 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. value: 10.00 points Required: Using the indirect method, determine the net cash for operating activities for 2014. (Negative amount should be entered with a minus sign.) Using the information in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for 2014. (List any deduction in cash and cash outflows as negative amounts.)Explanation / Answer
Cash flows from operating activities
Net income before tax
$92
Adjustments for:
Depreciation and amortization
$24
Loss on sale of equipment
3
Gain on sale of investment
(6)
21
113
Increase in accounts receivables
(78)
Decrease in inventories
38
Increase in Prepaid Expenses
Increase in accounts payables
Decrease in Accrued Liabilities
Taxes Paid
(2)
77
(6)
29
(17)
Cash generated from operations
125
Less: Asset sold (Cost) = ( 31)
Gross Fixed Assets (Closing) = 504
Additions = 110
Less : Dep on Asset sold = (10)
Balance Accumulated Depreciation = 61
Closing Accumulated Depreciation = 85
Depreciation Additional for the year = 24
Add: For the year Provision = 25
Total = 89
Less: Closing Provision for Income Tax = 72
Tax paid = 17
4.Opening Long Term Investments = 34
Cost of Long Term Investments sold = (6)
Closing Long Term Investments = 28
5.Opening Retained Earnings = 93
Add: Net Income after tax = 67
Total = 160
Closing Retained Earnings = 125
Dividend paid = 35
Cash flows from investing activities
Purchase of property, plant, and equipment
(110)
Proceeds from sale of equipment
Proceeds from sale of investment
18
12
Net cash used in investing activities
(80)
Cash flows from financing activities
Proceeds from issue of bonds
27
Repurchase of Common Stock
(35)
Dividends paid
(35)
Net cash used in financing activities
Net Cash in Operating activities
Net increase in Cash and Cash equivalents
Opening Cash
Closing Cash
(43)
125
2
12
14
Cash flows from operating activities
Net income before tax
$92
Adjustments for:
Depreciation and amortization
$24
Loss on sale of equipment
3
Gain on sale of investment
(6)
21
113
Increase in accounts receivables
(78)
Decrease in inventories
38
Increase in Prepaid Expenses
Increase in accounts payables
Decrease in Accrued Liabilities
Taxes Paid
(2)
77
(6)
29
(17)
Cash generated from operations
125
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