Question

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Comparative financial statements for Weaver Company follow:

Weaver Company Comparative Balance Sheet December 31, 2015 and 2014
	2015		2014
Assets
Cash	$	5	$	12
Accounts receivable		308		229
Inventory		155		195
Prepaid expenses		8		5
Total current assets		476		441
Property, plant, and equipment		509		431
Less accumulated depreciation		(86)		(71)
Net property, plant, and equipment		423		360
Long-term investments		24		31
Total assets	$	923	$	832
Liabilities and Stockholders' Equity
Accounts payable	$	301	$	224
Accrued liabilities		71		78
Income taxes payable		75		65
Total current liabilities		447		367
Bonds payable		197		170
Total liabilities		644		537
Common stock		161		202
Retained earnings		118		93
Total stockholders’ equity		279		295
Total liabilities and stockholders' equity	$	923	$	832

Weaver Company Income Statement For the Year Ended December 31, 2015
Sales			$	754
Cost of goods sold				447
Gross margin				307
Selling and administrative expenses				219
Net operating income				88
Nonoperating items:
Gain on sale of investments	$	5
Loss on sale of equipment		(2)		3
Income before taxes				91
Income taxes				25
Net income			$	66

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 $7 when purchased several years ago. A cash dividend was paid during 2015 and the company repurchased $41 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.)

References

eBook & Resources

WorksheetLearning Objective: 12-01 Classify cash inflows and outflows as relating to operating, investing, or financing activities.

Difficulty: 2 MediumLearning Objective: 12-02 Prepare a statement of cash flows using the indirect method to determine the net cash provided by operating activities.

Check my work

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

Solution:

Part 1 --- Net cash provided by/used by operating activities for 2015

Cash Flow from Operating Activities:		$$	$$
Net Income		$66
Adjustments to reconcile net income to net cash flow from operating activities:
+	Depreciation Expenses (Non cash item) (Refer Note 1)	$25
+	Loss on Sale of Equipment	$2
-	Gain on Sale of Investments	-$5
Changes in current operating assets and liabilities:
-	Increase in Accounts Receivable (308 - 229)	-$79
+	Decrease in Inventories (195-155)	$40
-	Increase in Prepaid Expenses (8-5)	-$3
+	Increase in Accounts Payable (301-224)	$77
-	Decrease in Accrued Liabilities (78 - 71)	-$7
-	Income Tax Expenses Paid (Refer Note 2)	-$15
Net Cash provided by Operative Activities			$101

Note 1 --- Depreciation Expenses

WE need to prepare the T-Accounts of Accumulated Depreciation and Property Plant and Equipment

Property, plant, and equipment
	Debit		Credit
Beg. Bal	431	Cost of Plant Sold	30
Purchased New (bal fig)	108	Ending Bal	509
	539		539
Accumulated Depreciation
	Debit		Credit
Depreciation related to Plant Sold	10	Beg. Bal	71
Ending Bal	86	Depreciation Expense for the Year (bal Fig)	25
	96		96

Note 2 ---

Income Tax
	Debit		Credit
Cash (Tax Paid) (bal fig)	15	Beg. Bal	65
Ending Bal	75	Income Tax Expense for the year (refer income statement)	25
	90		90

Part 2 --- Cash Flow Statement

Cash Flow Statement (Indirect Method)
Cash Flow from Operating Activities:		$$	$$
Net Income		$66
Adjustments to reconcile net income to net cash flow from operating activities:
+	Depreciation Expenses (Non cash item) (Refer Note 1)	$25
+	Loss on Sale of Equipment	$2
-	Gain on Sale of Investments	-$5
Changes in current operating assets and liabilities:
-	Increase in Accounts Receivable (308 - 229)	-$79
+	Decrease in Inventories (195-155)	$40
-	Increase in Prepaid Expenses (8-5)	-$3
+	Increase in Accounts Payable (301-224)	$77
-	Decrease in Accrued Liabilities (78 - 71)	-$7
-	Income Tax Expenses Paid (Refer Note 2)	-$15
Net Cash generated from Operative Activities			$101
Cash Flow from Investing Activities:
-	Purchase of Equipment(Refer Note 1)	-$108
+	Sale of Equipment	$18
+	Sale of Investment	$12
Net Cash used by Investing Activities			-$78
Cash Flow from Financing Activities:
-	Purchases Treasury stock (202-161)	-$41
+	Proceeds from Issuance of bond (197-170)	$27
-	Dividend Paid (93+66-118)	-$41
Net Cash generated from Financing Activities			-$55
Net Increase/(Decrease) in Cash and Cash Equivalents			-$32
Cash and Cash Equivalents at the beginning of the year			$12
Cash and Cash Equivalents at the end of the year			-$20

Note --- Answer is not coming correct… pls check question whether any information is missing.

$25 difference….pls check where any transaction of $25 is missing..

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