problem 1

Required:

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

Required information

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

Comparative financial statements for Weaver Company follow:

Weaver Company Comparative Balance Sheet at December 31
	This Year				Last Year
Assets
Cash	$	2			$	13
Accounts receivable		307				230
Inventory		158				195
Prepaid expenses		9				6
Total current assets		476				444
Property, plant, and equipment		513				434
Less accumulated depreciation		(85)				(71)
Net property, plant, and equipment		428				363
Long-term investments		25				32
Total assets	$	929			$	839
Liabilities and Stockholders' Equity
Accounts payable	$	305			$	226
Accrued liabilities		72				79
Income taxes payable		73				64
Total current liabilities		450				369
Bonds payable		197				172
Total liabilities		647				541
Common stock		161				202
Retained earnings		121				96
Total stockholders equity		282				298
Total liabilities and stockholders' equity	$	929			$	839

Weaver Company Income Statement For This Year Ended December 31
Sales					$	754
Cost of goods sold						445
Gross margin						309
Selling and administrative expenses						222
Net operating income						87
Nonoperating items:
Gain on sale of investments	$	5
Loss on sale of equipment		(3)				2
Income before taxes						89
Income taxes						23
Net income					$	66

During this year, Weaver sold some equipment for $18 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 $41 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.

Problem 2

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.)