Cash flows from operating, investing, and financing activities—direct method The following information is available from Gray Co.’s accounting records for the year ended December 31, 2010 (amounts in millions):
Cash dividends declared and paid | $ 350 |
Retirement of bonds payable at maturity | 200 |
Interest and taxes paid | 150 |
Proceeds of common stock issued | 550 |
Proceeds from the sale of land | 125 |
Collections from customers | 3,175 |
Cash paid to suppliers and employees | ? |
Purchase of buildings and equipment | ? |
Required:
a. The net cash provided by operating activities for Gray Co. for the year ended December 31, 2010, is $1,225 million. Calculate the cash paid to suppliers and employees.
b. The increase in cash for the year was $250 million. Calculate the amount of cash used to purchase buildings and equipment. Your answer to part a should be considered in your calculation. (Hint: Set up a model of the statement of cash flows to determine the net cash provided [used] by operating and investing activities, and then solve for the missing amounts.)
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