Reference no: EM132495107
The following information has been reported by Laporte Inc. on its statements of ?nancial 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
Cash $ 120 $ 83
Accounts receivable 49 39
Merchandise inventory 43 47
Long-term investments - 33
Property, plant, and equipment 241 200
Accumulated depreciation (93) (111)
Total assets $ 360 $291
Accounts payable $ 39 68
Income taxes payable 18 20
Long-term borrowings 95 35
Contributed capital 145 115
Retained earnings 63 53
Total liabilities and shareholders' equity $ 360 $ 291
Statement of Earnings
Sales $ 185
Cost of sales (99)
Gross pro?t 86
Depreciation expense (25)
Other operating expenses (41.5)
Earnings from operations 19.5
Gain on sale of investments 21
Loss on sale of equipment (17)
Earnings before income tax 23.5
Income tax expense 9.4 Net earnings $ 14.1
Additional information is as follows:
a. Old equipment was sold for cash during 2017. It had an original cost of $55 and an accumulated depreciation of $43.
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:
Question 1. Prepare a statement of cash flows for Laporte Inc. for the year ended December 31, 2017 by using the direct method. (Negative answers should be indicated by a minus sign. Enter your answers in millions.)