The following information is available from Bromfield Co.’s accounting records for the year ended December 31,...

The following information is available from Bromfield Co.’s accounting records for the year ended December 31, 2013 (amounts in millions):


Cash dividends declared and paid	$	323
Interest and taxes paid		76
Collections from customers		1,338
Payment of long-term debt		214
Purchase of land and buildings		169
Cash paid to suppliers and employees		789
Issuance of preferred stock		307
Proceeds from the sale of equipment		62

(a) Calculate the net cash provided (used) by operating activities for Bromfield Co. for the year ended December 31, 2013.
(b) Calculate the net cash provided (used) by investing activities
(c) Calculate the net cash provided (used) by financing activities
(d) Calculate the net increase (decrease) in cash for the year

Solutions

Expert Solution

(a)-Net cash provided by operating activities

Net cash provided by operating activities = Collections from customers - Cash paid to suppliers and employees - Interest and taxes paid

= $1,338 -789 -76

= $473

(b)-Net cash used by investing activities

Net cash used by investing activities = Proceeds from the sale of equipment - Purchase of land and buildings

= $62 – 169

= -$107 (Net Cash Used)

(c)-The net cash used by financing activities

The net cash used by financing activities = Issuance of preferred stock - Payment of long-term debt - Cash dividends declared and paid

= $307 -214 -323

= -$230 (Net Cash Used)

(d)-The net increase in cash for the year

Net Increase in cash = Net cash provided by operating activities + Net cash provided by investing activities - Net cash used in financing activities

= $473 – 107 – 230

= $136

“Net increase in cash = $136”

ekkarill92 answered 1 year ago

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