Homework SourseComparative financial statements for Weaver Company follow D
Comparative financial statements for Weaver Company follow:
During this year, Weaver sold some equipment for $20 that had cost $40 and on which there was accumulated depreciation of $16. In addition, the company sold long-term investments for $10 that had cost $3 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.
2. Using the information in (1) above, 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.)
| Weaver Company Comparative Balance Sheet at December 31 | |||||
| This Year | Last Year | ||||
| Assets | |||||
| Cash | $ | 9 | $ | 15 | |
| Accounts receivable | 340 | 240 | |||
| Inventory | 125 | 175 | |||
| Prepaid expenses | 10 | 6 | |||
| Total current assets | 484 | 436 | |||
| Property, plant, and equipment | 610 | 470 | |||
| Less accumulated depreciation | 93 | 85 | |||
| Net property, plant, and equipment | 517 | 385 | |||
| Long-term investments | 16 | 19 | |||
| Total assets | $ | 1,017 | $ | 840 | |
| Liabilities and Stockholders\' Equity | |||||
| Accounts payable | $ | 310 | $ | 230 | |
| Accrued liabilities | 60 | 72 | |||
| Income taxes payable | 40 | 34 | |||
| Total current liabilities | 410 | 336 | |||
| Bonds payable | 290 | 180 | |||
| Total liabilities | 700 | 516 | |||
| Common stock | 210 | 250 | |||
| Retained earnings | 107 | 74 | |||
| Total stockholders’ equity | 317 | 324 | |||
| Total liabilities and stockholders\' equity | $ | 1,017 | $ | 840 | |
Solution
2. Using the information in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for this year.
Working note :
1. Using the indirect method, determine the net cash provided by/used in operating activities for this year.
| Cash flow from operating activities | 104 | |
| Cash flow from investing activities | ||
| Sale of equipment | 20 | |
| Sale of long term investment | 10 | |
| Purchase of equipment | (180) | |
| Net cash flow from investing activities | (150) | |
| Cash flow from financing activities | ||
| repurchased stock | (40) | |
| Issue common stock | 110 | |
| Dividend paid | (30) | |
| Net cash flow from financing activities | 40 | |
| Net cash flow | (6) | |
| Beginning cash | 15 | |
| Ending cash | 9 |
