Required information [The following information applies to the questions display
ID: 2578315 • Letter: R
Question
Required information
[The following information applies to the questions displayed below.]
Comparative financial statements for Weaver Company follow:
During this year, Weaver sold some equipment for $19 that had cost $30 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $13 that had cost $6 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $39 of its own stock. This year Weaver did not retire any bonds.
Required:
1. Using the indirect method, determine the net cash provided by/used in operating activities for this year. Please provide the whole Statement of Cash Flows (using Indirect Method) for Weaver Company.
Weaver CompanyComparative Balance Sheet
at December 31 This Year Last Year Assets Cash $ 2 $ 12 Accounts receivable 308 230 Inventory 157 194 Prepaid expenses 9 5 Total current assets 476 441 Property, plant, and equipment 514 436 Less accumulated depreciation (86 ) (72 ) Net property, plant, and equipment 428 364 Long-term investments 26 32 Total assets $ 930 $ 837 Liabilities and Stockholders' Equity Accounts payable $ 302 $ 225 Accrued liabilities 73 77 Income taxes payable 71 65 Total current liabilities 446 367 Bonds payable 195 172 Total liabilities 641 539 Common stock 162 201 Retained earnings 127 97 Total stockholders’ equity 289 298 Total liabilities and stockholders' equity $ 930 $ 837
Explanation / Answer
Statement of cash flows using the indirect method:
Particulars
Amount ($)
Cash from operating Activities
Net Income
69
Add: Depreciation (86-72+10)
Loss on sale of equipment (30-10-19)
Gain on sale of investments (13-6)
Interest Paid
Income Tax Expense
24
1
-7
23
Less: Gain on sale of equipment
Cash Operating activities before working capital adjustments, and taxes
110
Working Capital Adjustments
Add: Increase in income tax payable
Increase in Accounts Payable (302-225)
Decrease in inventory (194-157)
Increase in Accrued Liabilities
77
37
Less: Increase in prepaid expense (9-5)
Increase in Accounts Receivable (308-230)
Decrease in Accrued Liabilities (77-73)
-4
-78
-4
Cash from operating activities before taxes and extraordinary items
138
Less: Extraordinary loss
Cash From operating activities before taxes
Less: Taxes (65+23-71)
-17
Cash from operating activities
121
Cash from investing activities
Add: Sale of equipment
Add: Sales of Investment
Less: Purchase of Equipment (514-436+30)
19
13
-108
Cash from Investing Activities
-76
Cash from financing Activities
Add: Issue of bonds
23
Less: Repurchase of own stock
Less: Redemption of bonds payable
Less: Cash Dividend paid (69-(127-97))
Less: Interest Paid
-39
-39
Cash from financing activities
-55
Net Increase / decrease in cash
-10
Opening Cash Balance
12
Closing Cash Balance
2
Particulars
Amount ($)
Cash from operating Activities
Net Income
69
Add: Depreciation (86-72+10)
Loss on sale of equipment (30-10-19)
Gain on sale of investments (13-6)
Interest Paid
Income Tax Expense
24
1
-7
23
Less: Gain on sale of equipment
Cash Operating activities before working capital adjustments, and taxes
110
Working Capital Adjustments
Add: Increase in income tax payable
Increase in Accounts Payable (302-225)
Decrease in inventory (194-157)
Increase in Accrued Liabilities
77
37
Less: Increase in prepaid expense (9-5)
Increase in Accounts Receivable (308-230)
Decrease in Accrued Liabilities (77-73)
-4
-78
-4
Cash from operating activities before taxes and extraordinary items
138
Less: Extraordinary loss
Cash From operating activities before taxes
Less: Taxes (65+23-71)
-17
Cash from operating activities
121
Cash from investing activities
Add: Sale of equipment
Add: Sales of Investment
Less: Purchase of Equipment (514-436+30)
19
13
-108
Cash from Investing Activities
-76
Cash from financing Activities
Add: Issue of bonds
23
Less: Repurchase of own stock
Less: Redemption of bonds payable
Less: Cash Dividend paid (69-(127-97))
Less: Interest Paid
-39
-39
Cash from financing activities
-55
Net Increase / decrease in cash
-10
Opening Cash Balance
12
Closing Cash Balance
2
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