Problem 12-7A Prepare a Statement of Cash Flows [LO12-1, LO12-2]

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

Comparative financial statements for Weaver Company follow:

Weaver Company Comparative Balance Sheet December 31, 2015 and 2014
	2015		2014
Assets
Cash	$	11	$	13
Accounts receivable		307		229
Inventory		156		194
Prepaid expenses		8		5
Total current assets		482		441
Property, plant, and equipment		508		428
Less accumulated depreciation		(86)		(70)
Net property, plant, and equipment		422		358
Long-term investments		27		34
Total assets	$	931	$	833
Liabilities and Stockholders' Equity
Accounts payable	$	304	$	226
Accrued liabilities		73		79
Income taxes payable		74		65
Total current liabilities		451		370
Bonds payable		196		170
Total liabilities		647		540
Common stock		163		200
Retained earnings		121		93
Total stockholders equity		284		293
Total liabilities and stockholders' equity	$	931	$	833
During 2015, Weaver sold some equipment for $19 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. A cash dividend was paid during 2015 and the company repurchased $37 of its own stock. Weaver did not retire any bonds during 2015.

Weaver Company Income Statement For the Year Ended December 31, 2015
Sales			$	754
Cost of goods sold				448
Gross margin				306
Selling and administrative expenses				223
Net operating income				83
Nonoperating items:
Gain on sale of investments	$	5
Loss on sale of equipment		(1)		4
Income before taxes				87
Income taxes				22
Net income			$	65

Part 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 2015. (List any deduction in cash and cash outflows as negative amounts.)

Weaver Company
Statement of Cash Flows - Indirect Method
For This Year Ended December 31, 2015
Operating activities:		l
Net income		$65
Adjustments to convert net income to cash basis:
Increase in accounts receivable	$(78)
Decrease in inventory	38
Increase in prepaid expenses	(3)
Increase in accounts payable	78
Decrease in accrued liabilities	(6)
Increase in income taxes payable	9
Loss on sale of equipment	1
Depreciation
Gain on sale of investments	(5)
		34
Net cash provided by operating activities		99
Investing activities:
Proceeds from sale of equipment
Proceeds from sale of long-term investments
Additions to plant and equipment
Net cash used in investing activities		0
Financing activities:
Issuance of bonds payable
Cash dividends
Decrease in common stock
Net cash used in financing activities		0
Net decrease in cash		99
Beginning cash and cash equivalents
Ending cash and cash equivalents		$99