Question

omparative financial statements for Weaver Company follow:

Weaver Company Comparative Balance Sheet December 31, 2015 and 2014
	2015		2014
Assets
Cash	$	7	$	13
Accounts receivable		308		230
Inventory		159		195
Prepaid expenses		9		5
Total current assets		483		443
Property, plant, and equipment		503		424
Less accumulated depreciation		(86)		(70)
Net property, plant, and equipment		417		354
Long-term investments		26		32
Total assets	$	926	$	829
Liabilities and Stockholders' Equity
Accounts payable	$	304	$	225
Accrued liabilities		72		77
Income taxes payable		72		64
Total current liabilities		448		366
Bonds payable		199		170
Total liabilities		647		536
Common stock		164		201
Retained earnings		115		92
Total stockholders’ equity		279		293
Total liabilities and stockholders' equity	$	926	$	829

Weaver Company Income Statement For the Year Ended December 31, 2015
Sales			$	752
Cost of goods sold				449
Gross margin				303
Selling and administrative expenses				223
Net operating income				80
Nonoperating items:
Gain on sale of investments	$	6
Loss on sale of equipment		(2)		4
Income before taxes				84
Income taxes				24
Net income			$	60

During 2015, Weaver sold some equipment for $18 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 $6 when purchased several years ago. A cash dividend was paid during 2015 and the company repurchased $37 of its own stock. Weaver did not retire any bonds during 2015.

1.

value:
10.00 points

Required information

Required:
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.)

2.

value:
10.00 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
Cash Flows from Operating Activities
For the year ended December 2015
	Amount $
Operating Activities
Net Income	60
Adjustments:
Non-Cash adjustment:
Depreciation (86-(70-10))	26
Loss on sale of equipment (30-10-18)	2
Gain on sale of investment (12-6)	-6
Taxes paid	24
Due to changes in Working capital
Due to changes in accounts receivable (308-230)	-78
Due to changes in Inventories (159-195)	36
Due to changes in accounts payable (304-225)	79
Due to changes in accruals (72-77)	-5
Due to changes in prepaid expenses (9-5)	-4
Taxes paid (24+64-72)	-16
Net Cash provided (used) by operating activities	118
2)
Weaver Company
Statement of Cash Flows
For the year ended December 2015
	Amount $
Operating Activities
Net Cash provided (used) by operating activities	118
Investing Activities
Cash used to acquire gross fixed assets (503-424+30)	-109
Cash from sale of equipment	18
Due to change in long-term investments	12
Net cash provided (used) by investing activities	-79
Financing Activities
Due to change in bonds payable (199-170)	29
Due to change in common stock (164-201)	-37
Payment of common dividends ((60-(115-92)	-37
Net cash provided (used) by investing activities)	-45
Net increase/decrease in cash	-6
Add: Cash balance at the begining of the year	13
Cash balance at the end of the year	7