1. Borrowing and Payment activity

Beverly is actively developing opportunities to expand its operations in the surrounding region and intends to complete construction and open each of the new stores over the next three years. As a result of this growing need to obtain new, readily available capital, Beverly entered into a three-year revolving line of credit (the "Facility") with its bank on January 1, 2010. The line of credit has a maximum borrowing capacity of $100 million.

Required:

1a. Should Beverly present the borrowing and payment activity related to its revolving line of credit as

cash flows from operating, investing, or financing activities for the year ended December 31, 2010?

1b. Based on the following facts and circumstances, determine whether Beverly should present its

borrowing and payment activity under the Facility on a net or gross basis within the financing

activities section of its statement of cash flows for the year ended December 31, 2010.

The line of credit has a maximum borrowing capacity of $100 million, and

under the terms of the agreement, all draws are considered to be due on demand.

On July 15, 2010, Beverly drew $60 million on the Facility.

On August 30, 2010, Beverly drew an additional $40 million on the Facility.

On September 30, 2010, Beverly paid down the draws by $50 million.

Assume the volume of transactions is considered to be large.