During 2015, Weaver sold some equipment for $19 that had cost $30 and on which t

Question

     During 2015, 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 $12 that had cost $7 when purchased several years ago. A cash dividend was paid during 2015 and the company repurchased $39 of its own stock. Weaver did not retire any bonds during 2015.

1. Using the indirect method, determine the net cash provided by/used by operating activities for 2015.(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 2015. (List any deduction in cash and cash outflows as negative amounts.)

Explanation / Answer

1) Net Income 91 Add : Depriciation 24 refer working below Decrease in inventory 37 Increase in accounts payable 79 140 Less : Increase in accounts receivable 76 Increase in prepaid expenses 3 Decrease in accrued liabilities 6 Net gain on assets 4 Income tax paid 14 103 refer working below Cash flow from operations 128 Depriciation for the year opening accumulated depriciation 72 Less : accumulated depriciation on equipment sold 10 Less : closing accumulated depriciation 86 Depriciation for the year 24 Income tax paid opening tax payable 65 Add : tax liability for the year 23 Less : closing tax payable 74 Income tax paid 14 2) Cash flow from operation ( refer 1 above) 128 Cash flow from investing activities Purchase of equipment -109 refer working below Proceeds from sale of equipment 19 proceeds from sale of investments 12 Cash flow from investing activity -78 Cash flow from financing activity proceeds from bonds 28 Less Dividends paid 39 refer working below treasury stock purchased 39 net cash flow from financing activity -50 Net cash Flow 0 Beginning cash balance 11 Ending cash balance 11 Change in cash balance 0 Dividends paid opening retained earnings 94 Add : net income for the year 68 Less closing retained earnings 123 Dividends paid 39 purchase of equipment closing property 512 Less :opening property (gross) 433 Add : gross value of equipment sold 30 purchase of equipment 109

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.