Comparative financial statements for Weaver Company follow: Weaver Company Comparative Balance Sheet at December 31 This Year Last Year Assets Cash $ 13 $ 13 Accounts receivable 291 228 Inventory 153 195 Prepaid expenses 9 6 Total current assets 466 442 Property, plant, and equipment 513 433 Less accumulated depreciation (82) (72) Net property, plant, and equipment 431 361 Long-term investments 26 33 Total assets $ 923 $ 836 Liabilities and Stockholders' Equity Accounts payable $ 301 $ 224 Accrued liabilities 73 79 Income taxes payable 71 65 Total current liabilities 445 368 Bonds payable 195 170 Total liabilities 640 538 Common stock 162 202 Retained earnings 121 96 Total stockholders’ equity 283 298 Total liabilities and stockholders' equity $ 923 $ 836 Weaver Company Income Statement For This Year Ended December 31 Sales $ 754 Cost of goods sold 447 Gross margin 307 Selling and administrative expenses 220 Net operating income 87 Nonoperating items: Gain on sale of investments $ 5 Loss on sale of equipment (2) 3 Income before taxes 90 Income taxes 25 Net income $ 65 During this year, Weaver sold some equipment for $18 that had cost $30 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 $40 of its own stock. This year Weaver did not retire any bonds. Required: 1. Using the indirect method, determine the net cash provided by/used in operating activities for this year.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 55PSA

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Question

Comparative financial statements for Weaver Company follow:

	This Year	Last Year
Weaver Company Comparative Balance Sheet at December 31
Assets
Cash	$ 13	$ 13
Accounts receivable	291	228
Inventory	153	195
Prepaid expenses	9	6
Total current assets	466	442
Property, plant, and equipment	513	433
Less accumulated depreciation	(82)	(72)
Net property, plant, and equipment	431	361
Long-term investments	26	33
Total assets	$ 923	$ 836
Liabilities and Stockholders' Equity
Accounts payable	$ 301	$ 224
Accrued liabilities	73	79
Income taxes payable	71	65
Total current liabilities	445	368
Bonds payable	195	170
Total liabilities	640	538
Common stock	162	202
Retained earnings	121	96
Total stockholders’ equity	283	298
Total liabilities and stockholders' equity	$ 923	$ 836

Weaver Company Income Statement For This Year Ended December 31
Sales		$ 754
Cost of goods sold		447
Gross margin		307
Selling and administrative expenses		220
Net operating income		87
Nonoperating items:
Gain on sale of investments	$ 5
Loss on sale of equipment	(2)	3
Income before taxes		90
Income taxes		25
Net income		$ 65

During this year, Weaver sold some equipment for $18 that had cost $30 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 $40 of its own stock. This year Weaver did not retire any bonds.

Required:

1. Using the indirect method, determine the net cash provided by/used in operating activities for this year.

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