Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below.] Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet at December 31 This Year Last Year Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Property, plant, and equipment 306 159 $ 11 230 195 Less accumulated depreciation Net property, plant, and equipment Long-term investments Total assets 482 507 85 422 26 $ 930 442 429 71 358 32 $832 Liabilities and Stockholders' Equity Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Common stock Retained earningS Total stockholders' equity Total liabilities and stockholders' equity $ 304 71 72 447 198 645 163 122 285 $ 930 $224 78 64 366 172 538 200 94 294 $832 Weaver Company Income Statement For This Year Ended December 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: $ 752 448 304 218 86 Gain on sale of investments Loss on sale of equipment Income before taxes Income taxes Net income (2) 4 90 25 $ 65

Explanation / Answer

Weaver Company Cash Flow Statement For year ended 31 December Cash flows from operating activities Net Income $    65 Adjustment to reconcile net income to: Depreciation expense $      24 85+10-71 Gain on sale of investment $      (6) Loss on sale of equipment $        2 Increase in accounts receivable $   (76) Decrease in inventory $      36 Increase in prepaid expense $      (3) increase in accounts payable $      80 Decrease in accrued liabilities $      (7) Increase in Income tax payable $        8 $    58 Net cash provided by operating activities $ 123 Cash flows from investing activities Proceeds from sale of equipment $      18 Proceeds from sale of investments $      12 Purchase of equipment $ (108) $429-$507-$30 Net cash used by investing activities $ (78) Cash flows from financing activities Purchase of treasury stock $   (37) Proceeds from issue of bonds $      26 Dividend paid $   (37) $122-$94-$65 Net cash used by financing activities $ (48) Net increase in cash and cash equivalents $     -3 Cash and cash equivalents at beginning of period $    11 Cash and cash equivalents at end of period $      8

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