Irish Paper Company (Irish) manufactures and markets various paper products around the world. Paper manufacturing is a  capital-intensive activity. A firm that does not adequately use its manufacturing capacity will experience poor operating performance. Sales of paper products tend to be  cyclical with general economic conditions, although consumer paper products are less cyclical than business paper products. Exhibit 16.16 on page 647 presents comparative income statements and Exhibit 16.17 on page 648 presents comparative balance sheets for Irish Paper Company for 2012, 2013, and 2014. Additional information appears below (amounts in millions of US$). (1)

  

      

  

      

  

      

    (5) In addition to the preceding cash expenditures, Irish acquired property, plant, and equipment during 2013 costing $221  million by assuming a long-term mortgage payable.    

(6) In 2014, Irish resold treasury stock for an amount greater than its cost.      

(7) Changes in Other Assets are investing activities.

    a. Prepare T-account worksheets for a statement of cash flows for Irish for 2012, 2013, and 2014.  

    b. Prepare a comparative statement of cash flows for Irish for 2012, 2013, and 2014 using the indirect method.

    c. Comment on the pattern of cash flows from operating, investing, and financing activities for each of the three years.

Cash Flow Information Investments in Affiliates. Expenditures on Property, Plant, and Equipment Long-Term Debt Issued *Excludes earnings and dividends 2014 $ (13) (315) 36 2013 $ 86 (931) 890 2012 $ (92) (775) 449