Adding an Investment Portfolio This spreadsheet assignment is a continuation of the spreadsheet assignments given in earlier chapters. If you completed those spreadsheets, you have a head start on this one.

This assignment is based on the spreadsheet prepared in part (1) of the spreadsheet assignment for Chapter 9. Review that assignment for a summary of the assumptions made in preparing a forecasted balance sheet, income statement, and statement of cash flows for 2010 for Handyman Company. Using those financial statements, complete the following exercise.

Handyman has decided that, in 2010, it will create an available-for-sale investment portfolio.

Handyman plans to invest $20 million in a variety of stocks and bonds. (Recall that the numbers in the Handyman spreadsheet are in millions.) As of the end of 2009, Handyman has no investment portfolio. Adapt your spreadsheet to include this expected $20 million investment portfolio as a current asset in 2010. Ignore the possibility of any interest, dividends, gains, or losses on this portfolio. Answer the following questions:

1. With the assumptions built into your spreadsheet, where will Handyman get the

$20 million in funding necessary to acquire these investment securities?

2. Where in the statement of cash flows did you put the cash outflow associated with the acquisition of these investment securities? Explain your placement.