Comparative financial statements for Weaver Company follow: Weaver Company Compa

Question

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 306 157 $ 11 231 196 Less accumulated depreciation Net property, plant, and equipment Long-term investments Total assets 469 513 (86) 427 25 443 434 (72) 362 31 $836 $ 921 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 $ 304 70 75 449 196 645 162 114 276 $ 921 $224 80 65 369 172 541 202 93 295 $836 Total liabilities and stockholders' equity

Explanation / Answer

Weaver Company Statement of Cash Flows-Indirect method (partial) Net Income 61 Add: Non cash/trade expenses: Depreciation 24 Loss on sale of equipment 2 Provision for tax 24 50 Less: Non cash/trade income: Profit on sale of investment 7 -7 Net Cash flow before working capital change 104 Add: Decrease in Current Assets & increase in current liabilities Inventory 39 Accounts payable 80 119 Less: Decrease in Current Liabilities & increase in current Assets Accrued liabilities -10 Accounts receivables -75 Prepaid expenses -4 -89 Cash folw from operating activities 134 Less: Tax Paid -14 -14 NET CASH FLOW FROM OPERATING ACTIVITIES 120 Working Notes: Equipment Account Particulars Amount Particulars Amount To Balance b/d 434 By cash (sold) 19 By P&L (loss) 2 By depreciation 10 To Bank (purchase) 110 By Balance c/d 513 544 544 Accumulated Depreciation account Particulars Amount Particulars Amount To Equipment 10 By balance b/d 72 To Balance c/d 86 By Profit and Loss A/c 24 Investment Account Particulars Amount Particulars Amount To Balance b/d 31 By Bank 13 To P&L (profit) 7 By Balance c/d 25 38 38 Provision for taxation account Particulars Amount Particulars Amount To Bank ( balancing figure) 14 By balance b/d 65 To Balance c/d 75 By Profit and Loss A/c 24 89 89

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