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Comparative financial statements for Weaver Company follow: During this year, Weaver sold some equipment for $10 that had cost $49 and on which there was accumulated depreciation of $30. In addition, the company sold long-term investments for $50 that had cost $38 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $109 of its own stock. This year Weaver did not retire any bonds. Required: 1. Using the direct method, adjust the company’s income statement for this year to a cash basis. 2. Using the information obtained in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for this year.

Comparative financial statements for Weaver Company follow: During this year, Weaver sold some equipment for $10 that had cost $49 and on which there was accumulated depreciation of $30. In addition, the company sold long-term investments for $50 that had cost $38 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $109 of its own stock. This year Weaver did not retire any bonds. Required: 1. Using the direct method, adjust the company’s income statement for this year to a cash basis. 2. Using the information obtained in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for this year.

Financial Reporting, Financial Statement Analysis and Valuation
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter8: Investing Activities
Section: Chapter Questions
Problem 1.3AIC: Estimate the average total estimated useful life of depreciable property, plant, and equipment....
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Comparative financial statements for Weaver Company follow:

During this year, Weaver sold some equipment for $10 that had cost $49 and on which there was
accumulated depreciation of $30. In addition, the company sold long-term investments for $50 that
had cost $38 when purchased several years ago. Weaver paid a cash dividend this year and the
company repurchased $109 of its own stock. This year Weaver did not retire any bonds.

Required:
1. Using the direct method, adjust the company’s income statement for this year to a cash basis.
2. Using the information obtained in (1) above, along with an analysis of the remaining balance sheet
accounts, prepare a statement of cash flows for this year.

Weaver Company Comparative Balance Sheet at December 31 This Year Last Year Assets Cash Accounts receivable 9 $ 21 $ 610 175 380 Inventory Prepaid expenses Total current assets 240 10 8 804 649 Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Long-term investments 690 580 70 80 610 510 10 48 Total assets $ 1,424 $ 1,207 Liabilities and Stockholders' Equity Accounts payable Accrued liabilities $ 400 $ 290 50 60 Income taxes payable 85 78 Total current liabilities 535 390 428 280 Bonds payable Total liabilities 925 708 Common stock 341 450 49 Retained earnings Total stockholders' equity 158 499 499 Total liabilities and stockholders' equity$ 1,424 $ 1,207
Transcribed Image Text:Weaver Company Comparative Balance Sheet at December 31 This Year Last Year Assets Cash Accounts receivable 9 $ 21 $ 610 175 380 Inventory Prepaid expenses Total current assets 240 10 8 804 649 Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Long-term investments 690 580 70 80 610 510 10 48 Total assets $ 1,424 $ 1,207 Liabilities and Stockholders' Equity Accounts payable Accrued liabilities $ 400 $ 290 50 60 Income taxes payable 85 78 Total current liabilities 535 390 428 280 Bonds payable Total liabilities 925 708 Common stock 341 450 49 Retained earnings Total stockholders' equity 158 499 499 Total liabilities and stockholders' equity$ 1,424 $ 1,207
Weaver Company Income Statement For This Year Ended December 31 Sales $880 Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of investments Loss on sale of equipment Income before taxes 490 390 203 187 $12 (9) . 190 3 Income taxes 57 Net income $133
Transcribed Image Text:Weaver Company Income Statement For This Year Ended December 31 Sales $880 Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of investments Loss on sale of equipment Income before taxes 490 390 203 187 $12 (9) . 190 3 Income taxes 57 Net income $133
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