Question

Comparative financial statements for Weaver Company follow:

Weaver Company Comparative Balance Sheet at December 31
	This Year				Last Year
Assets
Cash and cash equivalents	$	31			$	13
Accounts receivable		293				229
Inventory		156				196
Prepaid expenses		9				6
Total current assets		489				444
Property, plant, and equipment		504				425
Less accumulated depreciation		(82	)			(70	)
Net property, plant, and equipment		422				355
Long-term investments		28				35
Total assets	$	939			$	834
Liabilities and Stockholders' Equity
Accounts payable	$	303			$	226
Accrued liabilities		73				78
Income taxes payable		74				64
Total current liabilities		450				368
Bonds payable		199				170
Total liabilities		649				538
Common stock		165				201
Retained earnings		125				95
Total stockholders’ equity		290				296
Total liabilities and stockholders' equity	$	939			$	834

Weaver Company Income Statement For This Year Ended December 31
Sales					$	755
Cost of goods sold						448
Gross margin						307
Selling and administrative expenses						221
Net operating income						86
Nonoperating items:
Gain on sale of investments	$	5
Loss on sale of equipment		(2	)			3
Income before taxes						89
Income taxes						23
Net income					$	66

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 $12 that had cost $7 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $36 of its own stock. This year Weaver did not retire any bonds.

Problem 13-7 Part 1

Required:

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

	Weaver Company Statement of Cash Flows—Indirect Method (partial) 0 $0

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