2. Prepare the investing activities section of the statement of cash flows forLaporte Inc. for the year ended December 31, 2017. (Negative answersshould be indicated by a minus sign. Enter your answers in millions.)LAPORTE INC.Statement of Cash Flows (Partial)For the Year Ended December 31,2017Cash flows from investingactivities:Purchase of equipmentSale of equipmentSale of long-term investment$ (30)1240Net cash flow from22investing activities3. Compute each of the following for the year 2017: (a) quality of earnings ratio,(b) capital expenditures ratio, and (c) free cash flow. (Negative answersshould be indicated by a minus sign. Round "Ratio" answers to 2 decimalplaces.)Quality of(а)earnings ratio(0.56)Сapital(b) expendituresratio(c) Free cash flow4. Based on your answers to (1.) and (2.) above, determine the net cash flowfrom financing activities. (Hint: This can be done without preparing thefinancing activities section of the statement.) (Enter your answer inmillions.)Cash flow from financingactivities$ 125. The president of Laporte Inc., Tanya Turcotte, was provided with a copy ofthe operating activities section of the statement of cash flows that youprepared in (1.), and made the following comment: “This report is supposedto show operating cash inflows and outflows during the year, but I don't seehow much cash Laporte Inc. received from customers and how much it paidto trade suppliers and for income taxes. Please ask whoever prepared thisstatement to provide me with these numbers." Based on Tanya's comment,compute the following amounts for 2017: (Enter your answers in millions.)Cash collected froma.customersCash paid to tradeb.suppliersCash paid for incomeC.taxes The following information has been reported by Laporte Inc. on its statementsof financial position at December 31, 2016 and 2017, and on its statement ofearnings for the year ended December 31, 2017. Amounts are in millions ofdollars:Statements of Financial Position2017$ 1002016Cash$ 75Accounts receivable5038Merchandise inventoryLong-term investmentsProperty, plant, and equipmentAccumulated depreciation414632224168(72)(82)Total assets$343$277$ 38Accounts payableIncome taxes payableLong-term borrowingsContributed capitalRetained earnings5295351391306452Total liabilities and$343$277shareholders' equityStatement of Earnings$ 175(105)SalesCost of salesGross profitDepreciation expenseOther operating expenses70(10)(42)18Earnings from operationsGain on sale of investments8Loss on sale of equipment(2)Earnings before income taxIncome tax expense248Net earnings$ 16Additional information is as follows:a. Old equipment was sold for cash during 2017. It had an original cost of $34and an accumulated depreciation of $20.b. A new building was acquired during the year in exchange for a long-termnote for $60, payable in five years. In addition, new equipment waspurchased for cash.Required:1. Prepare the operating activities section of the statement of cash flows forLaporte Inc. for the year ended December 31, 2017 by using the indirectmethod. (Negative answers should be indicated by a minus sign. Enteryour answers in millions.)LAPUΙΕ INC.Statement of Cash Flows (Partial)For the Year Ended December 31, 2017Cash flows from operatingactivities:16Net earningsAdd (deduct) items not affectingcash:Depreciation expense$10

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The following information has been reported by Laporte Inc. on its statements of financial position at December 31, 2016 and 2017, and on its statement of earnings for the year ended December 31, 2017. Amounts are in millions of dollars: Statements of Financial Position 2017 2016 $ 100 $ 75 Cash Accounts receivable Merchandise inventory Long-term investments Property, plant, and equipment Accumulated depreciation 50 38 41 46 32 168 (82) 224 (72) Total assets $343 $277 $ 38 7 Accounts payable Income taxes payable Long-term borrowings Contributed capital Retained earnings 52 8. 95 139 35 130 52 64 Total liabilities and shareholders' equity $343 $277 Statement of Earnings $ 175 (105) Sales Cost of sales Gross profit Depreciation expense Other operating expenses 70 (10) (42) Earnings from operations Gain on sale of investments 18 8 Loss on sale of equipment (2) Earnings before income tax Income tax expense 24 Net earnings $ 16 Additional information is as follows: a. Old equipment was sold for cash during 2017. It had an original cost of $34 and an accumulated depreciation of $20. b. A new building was acquired during the year in exchange for a long-term note for $60, payable in five years. In addition, new equipment was purchased for cash. Required: 1. Prepare the operating activities section of the statement of cash flows for Laporte Inc. for the year ended December 31, 2017 by using the indirect method. (Negative answers should be indicated by a minus sign. Enter your answers in millions.) LAPORTE INC. Statement of Cash Flows (Partial) For the Year Ended December 31, 2017 Cash flows from operating activities: Net earnings Add (deduct) items not affecting cash: 2$ 16 Depreciation expense 10

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 3P