1] Whirlpool revealed that it sold Aga Food Service, Inc. for approximately $49 million and Dixie-Narco Vending Systems for approximately $46 million. Both of these companies were part of Maytag. How much did Whirlpool receive from the sale of portions of Maytag in addition to the amounts it received from selling Aga Foodservice and Dixie-Narco? Explain how you arrived at this figure.

edm27025_ch14_636-689.indd Page 685 7/23/08 9:54:11 AM user-s208 /Volumes/202/MHBR022/mhedm5/edm5ch14 Statement of Cash Flows Income Statement For the Year Ended December 31, 2010 Sales revenue Cost of goods sold Gross margin Operating expenses Salary expense Depreciation expense Utilities expense Operating income Nonoperating items Interest expense Loss on sale of equipment Net income $300,000 (144,000) 156,000 (88,000) (9,800) (6,400) 51,800 (2,400) (800) $ 48,600 Additional Information 1. Sold equipment costing $72,000 with accumulated depreciation of $56,000 for $15,200 cash. 2. Paid a $7,200 cash dividend to owners. Required Analyze the data and prepare a statement of cash flows using the direct method. ANALYZE, THINK, COMMUNICATE ATC 14-1 Business Application Case Analyzing cash flow at Whirlpool Corp. The following excerpt is from Whirlpool Corporation's Form 10-K for 2006. Maytag Acquisition On March 31, 2006, we completed our acquisition of Maytag. The aggregate purchase price for Maytag was approximately $1.9 billion, including approximately $848 million of cash and approximately 9.7 million shares of Whirlpool common stock. . . . In addition, we assumed Maytag's existing debt of approximately $973 million. We incurred approximately $102 million in acquisition-related expenses, which are included in the purchase price above. Initially, we borrowed amounts required to fund the cash portion of the purchase price through issuances in the U.S. commercial paper market and, in June 2006, refinanced a portion of this commercial paper through the issuance of long-term bonds. On September 6, 2006, we completed the sale of the Amana commercial microwave oven business to Aga Foodservice Inc. for approximately $49 million. . . . On October 23, 2006, we completed the sale of the Dixie-Narco vending systems business to Crane Co. for approximately $46 million. . . . The following exhibit shows Whirlpool's statement of cash flows for 2006. 685 edm27025_ch14_636-689.indd Page 686 7/23/08 9:54:11 AM user-s208 686 /Volumes/202/MHBR022/mhedm5/edm5ch14 Chapter 14 WHIRLPOOL CORPORATION Consolidated Statements of Cash Flows For the Year Ended December 31, 2006 (Millions of dollars) Operating Activities of Continuing Operations Net earnings (loss) Loss from discontinued operations Earnings from continuing operations Equity in earnings (loss) of affiliated companies Loss (gain) on disposition of assets Loss (gain) on disposition of businesses Depreciation and amortization Trade receivables Inventories Accounts payable Restructuring charges, net of cash paid Taxes deferred and payable, net Accrued pension Accrued payroll and other compensation Other assets and liabilities, net Cash provided by continuing operating activities Investing Activities of Continuing Operations Capital expenditures Proceeds from sale of assets Proceeds from sale of business Purchase of minority interest shares Proceeds from Maytag adjacent businesses Acquisitions of businesses, less cash acquired Cash used for investing activities of continuing operations Financing Activities of Continuing Operations Net proceeds (repayments) of short-term borrows Proceeds of long-term debt Repayments of long-term debt Dividends paid Common stock issued under stock plans Other financing activities, net Cash provided by financing activities of continuing operations Cash provided by (used for) discontinued operations Operating activities Investing activities Cash provided by discontinued operations Effect of exchange rate changes on cash and equivalents Increase (decrease) in cash and equivalents Cash and equivalents at beginning of year Cash and equivalents at end of year $ 433 53 486 5 (4) (32) 550 50 (118) 44 (80) (154) 53 25 55 880 (576) 86 36 (53) 110 (797) (1,194) 381 757 (1,046) (130) 54 13 29 8 (3) 5 18 (262) 524 $ 262 Required a. Whirlpool revealed that it sold Aga Foodservice Inc. for approximately $49 million and DixieNarco vending systems for approximately $46 million. Both of these companies were part of Maytag. How much did Whirlpool receive from the sale of portions of Maytag in addition to the amounts it received from selling Aga Foodservice and Dixie-Narco? b. After taking into consideration the cash received from selling off parts of Maytag, how much cash did Whirlpool pay for the Maytag acquisition in 2006? Assume that the Maytag acquisition was Whirlpool's only major acquisition for 2006. c. Whirlpool discussed some of the financing arrangements it entered into as a result of the Maytag acquisition. Ignoring those comments and focusing only on the company's statement of cash flows for the entire year of 2006, what appears to be the primary source of the cash that Whirlpool used to buy Maytag