Embarcadero Company’s most recent statement of cash flows is shown below.

Required

Use Embarcadero’s statement of cash flows to answer the following questions.

A. What was the primary source of cash inflow for the company?

B. Why was the company able to report a net cash inflow from operations when it incurred a net loss for the period?

C. What were the primary uses of cash during the period?

D. Did Receivables, Inventories, and Accounts Payable increase or decrease during the year?

E. If revenues (as reported on the income statement) were $3,960 for the year, how much cash was collected from customers during the year?

Embarcadero Company

Consolidated Statement of Cash Flows

For the Year Ended December 31, 2004

Operating activities

Net loss .......................$ (682)

Adjustments to reconcile NI to cash flows:

Depreciation and amortization .............. 592

Noncash gains and losses, net ............... (136)

Changes in:

Accounts receivable .................. 172

Inventories ....................... 110

Other current assets ................... (24)

Accounts payable ................... 98

Other current liabilities ................. 148

Cash provided by operations ................ 278

Investing activities

Investments and acquisitions ................ (424)

Capital expenditures .................... (42)

Sales of investments .................... 206

Cash used by investing activities .............. (260)

Financing activities

Increase in long-term debt .................. 1,014

Repurchase of common stock ................ (740)

Dividends paid ........................ (402)

Cash provided by financing activities ............. (128)

Decrease in cash ...................... $(110)