Question

QUESTION 3 At the beginning of the year Big Lots reported retained earnings of $2,024 million and accumulated other comprehensive income (AOCI) of $102 million. At the end of the year it reported retained earnings of $2,208 million and AOCI of $42 million. The company also reported net income for the year of $404 million. How much (in $ millions) did the company pay out in cash dividends during the year? Note that even though your answer will represent a cash outflow for the payment of dividends, you should present your result as a positive value. QUESTION 4 Through your analysis of the company's financial statements you have determined that during 2017 DRJ Enterprises issued new short-term debt of $335 million and repaid $903 million of long-term debt. It also issued new common stock of $712 million and paid cash dividends of $196 million. What was the company's total cash flow from financing activities (in $ millions)? if a net cash outflow, be certain to place a negative sign in front of your answer.

Answer 1

Question 3

New retained earning = Previous Retained Earning + Net income + Net Other Comprehensive Income

= 2042 + 404 + (102-42) = 2,506

Retained earning reported at end of year = New retained earning - Cash Dividend

Therefore, Cash dividend = Retained earning reported at end of year - New retained earning = 2,506 - 2,028 = $478 million

Question 4

Cash flow from financing activities = Cash inflow - Cash outflow = 1047 -1099 = -52

Cash inflow = New debt inflow + New common stock = 335 + 712 = 1047

Cash outflow = Debt paid off + Cash dividend paid = 903 + 196 = 1099

Net cash flow from financing activities = -$52 million

Hence, there is a net cash outflow from financing activities.