In: Accounting
Problem 13-7 Prepare a Statement of Cash Flows [LO13-1, LO13-2]
[The following information applies to the questions displayed below.]
Comparative financial statements for Weaver Company follow:
Weaver Company Comparative Balance Sheet at December 31 |
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This Year |
Last Year |
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Assets | ||||||||
Cash and cash equivalents | $ | 22 | $ | 11 | ||||
Accounts receivable | 292 | 230 | ||||||
Inventory | 156 | 194 | ||||||
Prepaid expenses | 8 | 5 | ||||||
Total current assets | 478 | 440 | ||||||
Property, plant, and equipment | 513 | 434 | ||||||
Less accumulated depreciation | (81 | ) | (71 | ) | ||||
Net property, plant, and equipment | 432 | 363 | ||||||
Long-term investments | 25 | 32 | ||||||
Total assets | $ | 935 | $ | 835 | ||||
Liabilities and Stockholders' Equity | ||||||||
Accounts payable | $ | 304 | $ | 224 | ||||
Accrued liabilities | 72 | 79 | ||||||
Income taxes payable | 74 | 64 | ||||||
Total current liabilities | 450 | 367 | ||||||
Bonds payable | 200 | 171 | ||||||
Total liabilities | 650 | 538 | ||||||
Common stock | 161 | 201 | ||||||
Retained earnings | 124 | 96 | ||||||
Total stockholders’ equity | 285 | 297 | ||||||
Total liabilities and stockholders' equity | $ | 935 | $ | 835 | ||||
Weaver Company Income Statement For This Year Ended December 31 |
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Sales | $ | 755 | ||||
Cost of goods sold | 446 | |||||
Gross margin | 309 | |||||
Selling and administrative expenses | 220 | |||||
Net operating income | 89 | |||||
Nonoperating items: | ||||||
Gain on sale of investments | $ | 6 | ||||
Loss on sale of equipment | (2 | ) | 4 | |||
Income before taxes | 93 | |||||
Income taxes | 25 | |||||
Net income | $ | 68 | ||||
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 $40 of its own stock. This year Weaver did not retire any bonds.
1. Using the indirect method, determine the net cash provided by/used in operating activities for this year.
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.)