Please show work. Comparative financial statements for Weaver Company follow: Du
ID: 2424881 • Letter: P
Question
Please show work.
Comparative financial statements for Weaver Company follow:
During 2014, Weaver sold some equipment for $10 that had cost $31 and on which there was accumulated depreciation of $12. In addition, the company sold long-term investments for $14 that had cost $4 when purchased several years ago. A cash dividend was paid during 2014 and the company repurchased $35 of its own stock. Weaver did not retire any bonds during 2014.
Using the direct method, adjust the company’s income statement for 2014 to a cash basis.(Adjustment amounts that are to be deducted should be indicated with a minus sign.)
Using the information in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for 2014. (Cash outflows and amounts to be deducted should be indicated with a minus si
gn.)
Please show work.
Comparative financial statements for Weaver Company follow:
Explanation / Answer
Workings:
Cash Flow Statement for the year ended December 31 2014 ( Direct Method)
Cash received from customers:
Cash disbursements for selling and administrative expenses:
Cash disbursements for merchandise purchased
$ Cash flows from operating activities Cash received from customers 650 Cash disbursements for Selling and administrative expenses 196 Income tax 9 Merchandise purchased 330 (535) Cash flows from operating activities 115 Cash flows from investing activities Purchase of equipment (141) Sale of equipment 10 Sale of long-term investments 14 Net cash used in investing activities (117) Cash flows from financing activities Cash dividends paid (14) Repurchase of stock (35) Issue of bonds 45 Net cash used in financing activities (4) Net decrease in cash (6) Beginning cash and cash equivalents 10 Ending cash and cash equivalents 4