Comparative financial statements for Weaver Company foliow: Weaver Company Compa
ID: 2534531 • Letter: C
Question
Comparative financial statements for Weaver Company foliow: Weaver Company Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Assets Cash Accounts recelvable Inventory Prepald expenses $ 9 $11 230 194 305 157 Total current assets 480 516 (86) Property, plant, and equipment 436 Less accumulated depreclation Net property, plant, and equipment Long-term Investments Total assets (71) 365 31 934 836 430 Liablites and Stockholders' Equity Accounts payable Accrued llabillties Income taxes payable $302 225 79 64 72 75 Total current llabllities Bonds payable 449 368 198 647 164 170 538 202 Total llabllitles Common stock Retalned earnings Total stockholders' equity Total llablitles and stockholders' equity 123 96 287 298 934 836Explanation / Answer
Solution:
Part 1 --- Refer Part 2 --Net Cash for Operating activities for 2014
Net Cash Provided by Operative Activities = $127
Part 2 –
WEAVER COMPANY
Cash Flow Statement (Indirect Method)
Cash Flow from Operating Activities:
$$
$$
Net Income
$65
Adjustments to convert net income to cash basis
+
Depreciation Expenses (Non cash item) (Refer Note 1)
$25
+
Loss on Sale of Equipment
$3
-
Gain on Sale of Investments
-$5
+
Income taxes (treated separately)
$22
-
Increase in Accounts Receivable (305 - 230)
-$75
+
Decrease in Inventories (194 - 157)
$37
-
Increase in Prepaid Expenses (9-5)
-$4
+
Increase in Accounts Payable (302 - 225)
$77
-
Decrease in Accrued Liabilities (79 - 72)
-$7
-
Income Tax Expenses Paid (Refer Note 2)
-$11
Net Cash Provided by Operative Activities
$127
Cash Flow from Investing Activities:
-
Purchase of Equipment(Refer Note 1)
-$111
+
Sale of Equipment
$18
+
Sale of Investment
$12
Net Cash used by Investing Activities
-$81
Cash Flow from Financing Activities:
-
Purchases Treasury stock
-$38
+
Proceeds from Issuance of bond (198 - 170)
$28
-
Dividend Paid (96+65-123)
-$38
Net Cash generated from Financing Activities
-$48
Net Increase/(Decrease) in Cash and Cash Equivalents
-$2
Cash and Cash Equivalents at the beginning of the year
$11
Cash and Cash Equivalents at the end of the year
$9
Note 1
Property, plant, and equipment
Debit
Credit
Beg. Bal
436
Cost of Plant Sold
31
Purchased New (bal fig)
111
Ending Bal
516
547
547
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)
11
Beg. Bal
64
Ending Bal
75
Income Tax Expense for the year (refer income statement)
22
86
86
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WEAVER COMPANY
Cash Flow Statement (Indirect Method)
Cash Flow from Operating Activities:
$$
$$
Net Income
$65
Adjustments to convert net income to cash basis
+
Depreciation Expenses (Non cash item) (Refer Note 1)
$25
+
Loss on Sale of Equipment
$3
-
Gain on Sale of Investments
-$5
+
Income taxes (treated separately)
$22
-
Increase in Accounts Receivable (305 - 230)
-$75
+
Decrease in Inventories (194 - 157)
$37
-
Increase in Prepaid Expenses (9-5)
-$4
+
Increase in Accounts Payable (302 - 225)
$77
-
Decrease in Accrued Liabilities (79 - 72)
-$7
-
Income Tax Expenses Paid (Refer Note 2)
-$11
Net Cash Provided by Operative Activities
$127
Cash Flow from Investing Activities:
-
Purchase of Equipment(Refer Note 1)
-$111
+
Sale of Equipment
$18
+
Sale of Investment
$12
Net Cash used by Investing Activities
-$81
Cash Flow from Financing Activities:
-
Purchases Treasury stock
-$38
+
Proceeds from Issuance of bond (198 - 170)
$28
-
Dividend Paid (96+65-123)
-$38
Net Cash generated from Financing Activities
-$48
Net Increase/(Decrease) in Cash and Cash Equivalents
-$2
Cash and Cash Equivalents at the beginning of the year
$11
Cash and Cash Equivalents at the end of the year
$9
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