(The toWowing information applies to the questions displayed below Comparative f
ID: 2487029 • Letter: #
Question
(The toWowing information applies to the questions displayed below Comparative financial statements for Weaver Company follow Weaver Company Comparative Balance Sheet December 31 2015 and 2014 2015 2014 305 159 230 196 Accounts receivable Prepaid expenses Total current assets 491 443 Property, plant, and equipment 503 424 Less accumulated depeeciation Net property, plant and equipment Long-term investments Total assets (85 72) 418 26 352 $ 935 $ 828 Liabilities and Stockholders Equity Accounts payable Accrued liebáties Income taxes payable $303 $224 73 63 449 364 73 Total current liabilities Bonds payable 197 171 646 535 165 20 Total liablities Common stock Retained earnings 124 92 289 293 $ 935 $ 828 Total stockholders equity Total labilities and stockholders' equity Weaver Company Income Statement the Year Ended December 31, 2015 755 447 Cost of goods sold Gross margin Selling and administrative expenses 308 219 Net operating income Nonoperating items s 5 Gain on sale of investments Loss on sale of equipment Income before taxes 91 23 Net income s 68 During 2015, Weaver sold some equipment for $18 that had cost $31 and on which there was accumulated depreciation of $10. In addtion, the company sold long-term investments for $12 that had cost $7 when purchased several years ago. A cash dividend was paid during 2015 and the company repurchssed $36 of its own stock. Weaver did not retire any bonds during 2015Explanation / Answer
Working note:
(1) Loss on sale of equipment = $(31 - 10 - 18) = $3
(2) Gain on sale of investment = $(12 - 7) = $5
(3) Ending retained earning = Beginning retained earning + Net income - Dividend
124 = 92 + 68 - Dividend
Dividend = 160 - 124 = 36
(4) Purchase of plant/property (PPE) = (418 - 31 - 352) = $35
So,
CASH FLOW FROM OPERATING ACTIVITIES $ Net Income 68 Add: Depreciation 10 Add: Loss on sale of equipment 3 Less: Gain on sale of investment -5 Less: Increase in Current Assets Accounts receivables -75 Prepaid expense -3 Less: Decrease in Current liabilities Accrued liabilities -4 Add: Decrease in current assets Inventory 37 Add: Increase in current liabilities Accounts payable 79 NET CASH FLOW FROM OPERATING ACTIVITIES (1) 110 CASH FLOW FROM INVESTING ACTIVITIES $ Sale of Plant, Property & equipment 18 Purchase of Plant, Property & equipment -35 Sale of long term investment 12 NET CASH FLOW FROM INVESTING ACTIVITIES (2) -5 CASH FLOW FROM FINANCING ACTIVITIES $ Dividend Paid -36 Stock repurchase -36 Increase in Bonds payable -26 NET CASH FLOW FROM FINANCING ACTIVITIES (3) -98 NET CASH INFLOW/(OUTFLOW) DURING YEAR (1) + (2) + (3) 7 Beginning Cash at Hand (2014) 11 Ending Cash at hand (2015) 18 CHANGE IN CASH DURING THE YEAR 7Related Questions
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