Question

Comparative financial statements for Weaver Company follow:

Weaver Company Comparative Balance Sheet December 31, 2015 and 2014
	2015		2014
Assets
Cash	$	-4	$	13
Accounts receivable		308		229
Inventory		156		195
Prepaid expenses		8		5
Total current assets		468		442
Property, plant, and equipment		510		430
Less accumulated depreciation		(86)		(70)
Net property, plant, and equipment		424		360
Long-term investments		27		33
Total assets	$	919	$	835
Liabilities and Stockholders' Equity
Accounts payable	$	304	$	225
Accrued liabilities		72		79
Income taxes payable		72		64
Total current liabilities		448		368
Bonds payable		195		171
Total liabilities		643		539
Common stock		160		202
Retained earnings		116		94
Total stockholders’ equity		276		296
Total liabilities and stockholders' equity	$	919	$	835

Weaver Company Income Statement For the Year Ended December 31, 2015
Sales			$	755
Cost of goods sold				450
Gross margin				305
Selling and administrative expenses				219
Net operating income				86
Nonoperating items:
Gain on sale of investments	$	6
Loss on sale of equipment		(3)		3
Income before taxes				89
Income taxes				25
Net income			$	64

During 2015, Weaver sold some equipment for $18 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 $6 when purchased several years ago. A cash dividend was paid during 2015 and the company repurchased $42 of its own stock. Weaver did not retire any bonds during 2015.

1.

value:
30.00 points

Required information

2.	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.)

Answer 1

1.

Weaver Company
Statement of Cash Flows
For the Year Ended November 30, 2015
Cash flows from operating activities
Net Income		$    64
Adjustments to reconcile net income to :
Depreciation expense	$   26		86-70+10
Gain on sale of investment	$   (6)
Loss on sale of equipment	$      3
Increase in accounts receivable	$ (79)		229-308
Decrease in inventory	$   39		195-156
Increase in prepaid expense	$   (3)		5-8
Increase in accounts payable	$   79		304-225
Decrease in accrued liabilities	$   (7)		72-79
Increase in income tax payable	$      8		72-64
		$    60
Net cash provided by operating activities		$ 124

2.

Weaver Company
Statement of Cash Flows
For the Year Ended November 30, 2015
Net cash provided by operating activities		$ 124
Cash flows from investing activities
Cash received from sale of Equipment	$      18
Cash received from sale of Investment	$      12
Cash paid to purchase Equipment	$ (111)		430-31-510
Net cash used by investing activities		$ (81)
Cash flows from financing activities
Cash paid as dividend	$   (42)		116-94-64
Cash received from issuance of bonds	$      24		195-171
Cash paid for purchase of treasury stock	$   (42)
Net cash provided by financing activities		$ (60)
Net Decrease in cash and cash equivalents		$ (17)
Cash and cash equivalents at beginning of period		$    13
Cash and cash equivalents at end of period		$    (4)