Analyzing Gateway, Inc., The financial statements of Gateway, Inc., presented in Appendix A include both a consolidated balance sheet and a consolidated statement of cash flows. By examining these two financial statements, answer the following questions:

a. What is the total of cash and cash equivalents reported by Gateway at December 31, 1998, in its balance sheet? Has this total increased or decreased from the prior year?

b. How does this total compare to net cash provided by operating activities, as reported in the statement of cash flows?

What amount of cash and cash equivalents would Gateway have at the end of 1998 if it had retained all of the cash generated by operations in 1998?

c. What were the primary nonoperating uses of Gateway’s cash during 1998?

d. Was Gateway able to pay for its capital expenditures during 1998 with the cash generated by operations?

e. In what ways can an analysis of the statement of cash flows help the decision maker in estimating the amounts and timing of future cash flows? How does the amount invested in property, plant, and equipment and Gateway’s dividend policy impact its cash flows?