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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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