1.
During 2014, 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 $13
that had cost $6 when purchased several years ago. A cash dividend was paid during 2014 and
the company repurchased $39 of its own stock. Weaver did not retire any bonds during 2014.
Using the indirect method, determine the net cash for operating activities for 2014. (Negative
amount should be entered 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. (List any deduction in cash and cash
outflows as negative amounts.)
Comparative financial statements for Weaver Company follow:
Solution
Statement of Cash Flows Particulars Amount Amount Opening cash and Cash Equivalents
              12.00 Cash Flow from Operating Activities Net income
                26.00 Add : Depreciation
                25.00 Less profit on invt
                (7.00) Add : Loss on sale of equip
                   2.00 Income tax prov
                25.00 Less Increase in AR
              (78.00) Add Decrease in Inv
                37.00 Less Increase In prepaid exp
                (4.00) Less : Decrease in Acc Liab
                (5.00) Add : Increase in Accounts payable
                76.00 Taxes paid              Â
(16.00) Cash Flow from Operating Activities 81 Cash Flow from Investing Activities Sale of
investments 13 Purchase of property plant and Equipment -108 Sale of equipment 18 Cash Flow
from Investing Activities             (77.00) Cash Flow from Financing
Activities Issue of Bonds                 29.00 Redemption of stock
              (39.00) Cash Flow from Financing Activities
            (10.00) Closing cash and cash Equivalents
                6.00