Required information Problem 14-7 Prepare a Statement of Cash Flows [LO14-1, LO1
ID: 2579896 • Letter: R
Question
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 CompanyComparative 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 11:19:30 AM a newconnect.mheducation.com Apex Connect Chapter 14 Homework G Saved Help Save & Exit Submit Check my work Required information 2. Using the information in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts.) Part 2 of 2 Weaver Company Statement of Cash Flows For This Year Ended December 31 eBook Operating activities: t cash provided by operating activities Investing activities: eeds from sale of long-term investments eeds from sale of equipment Additions to property, plant, and equipment Financing activities suance of bonds payable ash dividends paid t cash used in financing activities t decrease in cash Beginning cash and cash equivalents Ending cash and cash equivalents 26
Explanation / Answer
Ans. Cash Flow Statement for the year (in $)
Net income 62
Add: Loss of sale of equipment 2
less: Gain of sale of investment (5)
Add: Depreciation exp. * 24
Adjustment of Current Assets/Liabilities
Increase of Account Receivable (78)
Decrease of Inventory 37
Increase of prepaid exp. (3)
Increase of account payable 78
Decrease of Accured liabilities (6)
Increase I.tax 7
Cash flow from Operating Activities (1) 116
Cash flow from Investment Activities
Purchase of Fixed assets** (109)
Sale of Fixed Assets 19
Sale of Investment 12
Cash flow from Investment activites(2) (78)
Cash flow from Financial Activities
Issue of Bond 26
Buyback of Equity (38)
Payment of Dividend (38)
Cash flow from financial Activities (3) (50)
Net cash flow (1)+(2)+(3) = -12
Opening Balance of Cash of Last yr = 11
Closing Balance of Cash of this yr = -1
Note:-
* Calculation of Depreciation Exp. for the year
Depreciation exp. A/c
To Sale of Assets 10 By Balance B/d 71
To Balance C/d 85 By Dep. Exp. (Diff.) 24
95 95
** Calculation of Assets Purchase during the yr
Property ,plant and Equipment A/c
To Balance (429-71) $358 By Cost of Sale of Assets (31-10) $21
To Purchase of Assets (Diff.) $109 By Depreciation Exp. $24
By Balance C/d (507-85) $422
$467 $467
Note : 3 Calculation of Dividend Expenses
Opening Balance of Retained Earning $95
Profit During the year $62
Dividend amt during the yr (Difference) $38
Closing Balance of Retained earning $119
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.