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Comparative Financial Statements for Weaver Company

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Weaver Company
Comparative Balance Sheet
December 31, 2010 and 2009
2010 2009
Assets
Cash $31 $11
Accounts receivable 307 230
Inventory 158 195
Prepaid expenses 8 6
Plant and equipment 512 434
Less accumulated depreciation (86) (71)
Long-term investments 24 31
Total assets $954 $836
Liabilities and Stockholders' Equity
Accounts payable $302 $225
Accrued payable 71 80
Bonds payable 196 171
Deferred income taxes 74 65
Common stock 161 202
Retained earnings 150 93
Total liabilities and stockholders' equity $954 $836

Weaver Company
Income Statement
For the Year Ended December 31, 2010
Sales $755
Cost of goods sold 447
Gross margin 308
Selling and administrative expenses 218
Net operating income 90
Non operating items:
Gain on sale of investments $6
Loss on sale of equipment 1 5
Income before taxes 95
Income taxes 24
Net income $71

During 2010, the company sold some equipment for $19 that had cost $30 and on which was accumulated depreciation of $10. In addition, the company sold long-term investments for $13 that had cost $7 when purchased several years ago. Cash dividends totaling $14 were paid during 2010.

Required:
Using the indirect method, prepare a statement of cash flows for 2010.

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This solution provides a detailed a computation of the given finance problem.

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