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Chapter 12

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     During 2015, 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. A cash dividend was paid during 2015 and the company repurchased $40 of its own stock. Weaver did not retire any bonds during 2015.

4.

value:
10.00 points

Required information

Using the indirect method, determine the net cash provided by (used in) operating activities for 2015. (Negative amount should be entered with a minus sign.)

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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.

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5.

value:
10.00 points

Required information

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.)

Chapter 12

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Explanation / Answer

Cash Flow statement reports cash flows from three types of activities which are:

1. Cash Flow from operating activities which reports cash inflow and outflow from a company’s day to day operations.

2. Cash Flow from investing activities which reports cash inflow and outflow from a company’s changes in long term assets.

3. Cash Flow from financing activities reports cash inflow and outflow related to changes in company’s long term liabilities and stockholders’ equity.

statement of cash flows for 2015 and et cash provided by (used in) operating activities for 2015 is as prepared below:

Working:

Weaver Company Statement of Cash Flows For the Year Ended December 31,2015 Cash Flows From Operating Activities Net Income (Given) 63 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense 24 Less: Gain on sale of investments -7 Add: Loss on sale of equipment 4 Increase in Accounts Recievable -100 Decrease in Inventory 50 Increase in prepaid Expenses -4 Increase in accounts payable 80 Decrease in accrued liabilities -12 Increase in Income tax payable 6 Net Cash Provided by Operating Activities 104 Cash Flows From Investing Activities Purchase of Equipment -180 Sale of long term investments 10 Sale of Equipment 20 Net Cash Provided by Investing Activities -150 Cash Flows From Financing Activites Treasury Stock purchased -40 Payments of Cash Dividends -30 Bonds Purchased 110 Net Cash Used by Financing Activities 40 Net Increase in Cash -6 Cash at Beginning of the Year 15 Cash at end of Year 9

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