2. Prepare the investing activities section of the statement of cash flows f (Negative answers should be indicated by a minus sign. Enter your ans
2. Prepare the investing activities section of the statement of cash flows f (Negative answers should be indicated by a minus sign. Enter your ans
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:2. Prepare the investing activities section of the statement of cash flows for Laporte Inc. for the year ended December 31, 2020.
(Negative answers should be indicated by a minus sign. Enter your answers in millions.)
LAPORTE INC.
Statement of Cash Flows (Partial)
For the Year Ended December 31, 2020
Cash flows from investing activities:
Purchase of equipment
Sale of equipment
Sale of long-term investment
Net cash flow from investing activities
$
(37)

Transcribed Image Text:The following information has been reported by Laporte Inc. on its statements of financial position at December 31, 2019 and 2020
and on its statement of earnings for the year ended December 31, 2020. Amounts are in millions of dollars:
Statements of Financial Position
Cash
Accounts receivable
Merchandise inventory
Long-term investments
Property, plant, and equipment
Accumulated depreciation
Total assets
Accounts payable
Income taxes payable
Long-term borrowings
Contributed capital
Retained earnings
Total liabilities and shareholders' equity
Statement of Earnings
Sales
Cost of sales
Gross profit
Depreciation expense
Other operating expenses
Earnings from operations
Gain on sale of investments
Loss on sale of equipment
Earnings before income tax
Income tax expense
Net earnings
2020
$ 125
68
49
$
$
215
(57)
400
48
5
111
180
56
$ 400
$
$ 200
(120)
80
(10)
(51)
19
6
(2)
23
6
17
2019
$ 80
48
56
42
178
(72)
$ 332
62
6
61
160
43
$ 332
Additional information is as follows:
a. Old equipment was sold for cash during 2020. It had an original cost of $48 and an accumulated depreciation of $25.
b. A new building was acquired during the year in exchange for a long-term note for $50, payable in five years. In addition, new
equipment was purchased for cash.
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