Question

Comparative financial statements for Weaver Company follow:

Weaver Company Comparative Balance Sheet at December 31
	This Year				Last Year
Assets
Cash	$	14			$	12
Accounts receivable		293				229
Inventory		159				196
Prepaid expenses		8				6
Total current assets		474				443
Property, plant, and equipment		504				424
Less accumulated depreciation		(81	)			(72	)
Net property, plant, and equipment		423				352
Long-term investments		28				35
Total assets	$	925			$	830
Liabilities and Stockholders' Equity
Accounts payable	$	301			$	224
Accrued liabilities		71				78
Income taxes payable		74				63
Total current liabilities		446				365
Bonds payable		200				171
Total liabilities		646				536
Common stock		161				200
Retained earnings		118				94
Total stockholders’ equity		279				294
Total liabilities and stockholders' equity	$	925			$	830

Weaver Company Income Statement For This Year Ended December 31
Sales					$	753
Cost of goods sold						448
Gross margin						305
Selling and administrative expenses						223
Net operating income						82
Nonoperating items:
Gain on sale of investments	$	6
Loss on sale of equipment		(2	)			4
Income before taxes						86
Income taxes						23
Net income					$	63

During this year, Weaver sold some equipment for $19 that had cost $31 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $13 that had cost $7 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.

2. Using the information from Part 1, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts.)

Comparative financial statements for Weaver Company follow:

Weaver Company Comparative Balance Sheet at December 31
	This Year				Last Year
Assets
Cash	$	14			$	12
Accounts receivable		293				229
Inventory		159				196
Prepaid expenses		8				6
Total current assets		474				443
Property, plant, and equipment		504				424
Less accumulated depreciation		(81	)			(72	)
Net property, plant, and equipment		423				352
Long-term investments		28				35
Total assets	$	925			$	830
Liabilities and Stockholders' Equity
Accounts payable	$	301			$	224
Accrued liabilities		71				78
Income taxes payable		74				63
Total current liabilities		446				365
Bonds payable		200				171
Total liabilities		646				536
Common stock		161				200
Retained earnings		118				94
Total stockholders’ equity		279				294
Total liabilities and stockholders' equity	$	925			$	830

Weaver Company Income Statement For This Year Ended December 31
Sales					$	753
Cost of goods sold						448
Gross margin						305
Selling and administrative expenses						223
Net operating income						82
Nonoperating items:
Gain on sale of investments	$	6
Loss on sale of equipment		(2	)			4
Income before taxes						86
Income taxes						23
Net income					$	63

During this year, Weaver sold some equipment for $19 that had cost $31 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $13 that had cost $7 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.

Garrison_16e_Rechecks_2020_01_27

2. Using the information from Part 1, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts.)

Answer 1