"QUESTION:Comparative financial statements for Weaver Company follow:Weaver CompanyComparative Balance SheetDecember 31, 2014 and 20132014 2013Assets Cash $ 6 $ 12Accounts receivable 305 228 Inventory 160 196 Prepaid expenses 9 5 Total current assets 480 441 Property, plant, and equipment 511 432 Less accumulated depreciation (86)(71)Net property, plant, and equipment 425 361 Long-term investments 27 33 Total assets $ 932 $ 835Liabilities and Stockholders' Equity Accounts payable $ 303 $ 225Accrued liabilities 72 80 Income taxes payable 72 65 Total current liabilities 447 370 Bonds payable 195 170 Total liabilities 642 540Common stock 163 201 Retained earnings 127 94 Total stockholders’ equity 290 295 Total liabilities and stockholders' equity $ 932 $ 835Weaver CompanyIncome StatementFor the Year Ended December 31, 2014Sales $ 753 Cost of goods sold 445Gross margin 308Selling and administrative220expenses Net operating income 88Non operating items: Gain on sale of$ 7 investmentsLoss on sale of equipment (1) 6 Income before taxes 94Income taxes 23Net income $ 71During 2014, Weaver sold some equipment for $19 that had cost $30 and on whichthere was accumulated depreciation of $10. In addition, the company sold long-terminvestments for $13 that had cost $6 when purchased several years ago. A cash dividend was paid during 2014 and the company repurchased $38 of its own stock. Weaver did notretire any bonds during 2014.Required information:Required:1. Using the indirect method, determine the net cash for operating activities for2014. (Negative amount should be entered with a minus sign.)2. Using the information in (1) above, along with an analysis of the remaining balancesheet accounts, prepare a statement of cash flows for 2014. (List any deduction incash and cash outflows as negative amounts.)ANSWER:(1) Net cash flow from operating activities for 2014 (Indirect Method):Weaver CompanyStatement of Cash Flow (partial)Net Cash flow from Operating Activities: Net Income $71Adjustments to convert net income to a cash basis: Depreciation * $25 Increase in accounts receivable -$77Decrease in inventory $36Increase in prepaid expenses -$4Increase in accounts payable $78Decrease in accrued liabilities -$8Increase in income taxes payable $7Gain on sale of long-term investments -$7Loss on sale of Equipment $1$51 Net cash provided by operating activities $122* Depreciation=Closing Balance + Accumulated Depreciation on Equipment sold - Opening Balance= 86+10-71=25(2) Statement of cash flows for 2014 (Indirect Method):Weaver CompanyStatement of Cash Flow$122Net Cash flow from Operating Activities:Net Cash flow from Investing Activities: Proceeds from sale of long-term investments $13 Proceeds from sale of Equipment $19Purchase of Property, Plant & Equipment ** -$109Net cash provided by Investing activities -$77Net Cash flow from Financing Activities: Issuance of bonds payable $25Purchase of common stock -$38Cash dividends *** -$38Net cash provided by Financing activities -$51Net Increase/(decrease) in cash -$6Beginning cash and cash equivalents $12Ending cash and cash equivalents $6** Purchase of Equipment = Closing Balance + Cost of Equipment sold - Opening Balance = 511 +30 - 432 = 109*** Cash Dividend = Opening Retained Earnings + Net Income for 2014 - Closing Retained Earnings= 94 + 71 - 127 = 38Note: Rest all figures in Cash Flow statement are difference between 2013 and 2014 balances inBalance Sheet under operating and financing activity. Under Investing activity figures of actualproceeds from sale of long-term investment and equipment are as per information given in question. "