Required information Problem 14-7 Prepare a Statement of Cash Flows [LO14-1, LO1

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Required information

Problem 14-7 Prepare a Statement of Cash Flows [LO14-1, LO14-2]

[The following information applies to the questions displayed below.]

Comparative financial statements for Weaver Company follow:

During this year, Weaver sold some equipment for $19 that had cost $31 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $12 that had cost $7 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $38 of its own stock. This year Weaver did not retire any bonds.

Weaver Company
Comparative Balance Sheet
at December 31 This Year Last Year Assets Cash $ -1 $ 11 Accounts receivable 309 231 Inventory 159 196 Prepaid expenses 9 6 Total current assets 476 444 Property, plant, and equipment 507 429 Less accumulated depreciation (85 ) (71 ) Net property, plant, and equipment 422 358 Long-term investments 25 32 Total assets $ 923 $ 834 Liabilities and Stockholders' Equity Accounts payable $ 301 $ 225 Accrued liabilities 72 78 Income taxes payable 71 64 Total current liabilities 444 367 Bonds payable 197 171 Total liabilities 641 538 Common stock 163 201 Retained earnings 119 95 Total stockholders’ equity 282 296 Total liabilities and stockholders' equity $ 923 $ 834 Safari File Edit View History Bookmarks window Help 11% D Sun 26 Nov 11:18:11 AM a newconnect.mheducation.com Apex Connect Problern 12-10A Prepar Chapter 14 Homework G Saved Help Save & Exit Submit Check my work During this year, Weaver sold some equipment for $19 that had cost $31 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $12 that had cost $7 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $38 of its own stock. This year Weaver did not retire any bonds. Part 1 of 2 Problem 14-7 Part 1 Required: 1. Using the indirect method, determine the net cash provided by/used in operating activities for this year. eBook Weaver Company Statement of Cash Flows-Indirect Method (partial 62 Adjustments to convert net income to a cash basis Gain on sale of investments Loss on sale of equipment Increase in accounts receivable Increase in prepaid expenses Increase in accounts payable Decrease in accrued liablities Increase in income taxes payable t cash provided by operating activities S 62 26

Explanation / Answer

Operating activities: Net income 62 Adjustments to convert net income to a cash basis: Depreciation 24 Gain on sale of investments -5 Loss on sale of equipment 2 Increase in accounts receivable -78 Decrease in inventory 37 Increase in prepaid expenses -3 Increase in accounts payable 76 Decrease in accrued liabilities -6 Increase in income taxes payable 7 54 Net cash provided by operating activities 116

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