The following information has been reported by Laporte Inc. on its statements of financial position at December 31, 2016 and 2017, and on its statement of earnings for the year ended December 31, 2017 Amounts are in millions of dollars: Statements of Financial Position 2016 $ 95$ 71 30 38 24 160 2017 Cash Accounts receivable Merchandise inventory Long-term investments Property, plant, and equipment Accumulated depreciation 40 34 198 (70) (90) Total assets $297 $233 $ 24 Accounts payable Income taxes payable Long-term borrowings Contributed capital Retained earnings 82 138 48 130 31 Total liabilities and shareholders' equity $297 $233 Statement of Earnings Sales Cost of sales $155 (93) Gross proft Depreciation expense Other operating expenses 62 (10) (30) Earnings from operations Gain on sale of investments Loss on sale of equipment Earnings before income tax Income tax expense 28 Net earnings $ 22 Additional information is as follows: a. Old equipment was sold for cash during 2017. It had an original cost of $42 and an accumulated depreciation of $30 Scr b. A new building was acquired during the year in exchange for a long-term note for $60, payable in five years. In addition, new equipment was purchased for cash. Additional information is as follows: a. Old equipment was sold for cash during 2017. It had an original cost of $42 and an accumulated depreciation of $30 b. A new building was acquired during the year in exchange for a long-term note for $60, payable in five years. In addition, new equipment was purchased for cash Required 1. Prepare the operating activities section of the statement of cash flows for Laporte Inc. for the year ended December 31, 2017 by using the indirect method. (Negative answers should be indicated by a minus sign. Enter your answers in millions.) LAPORTE INC Statement of Cash Flows (Partial) For the Year Ended December 31, 2017 Cash flows from operating activities Net earnings Add (deduct) items not affecting cash Decrease in merchandise inventory Decrease in accounts payable Decrease in income tax payable Depreciation expense Increase in accounts receivable Gain on sale of investments Loss on sale of equipment 20 (10) (10) Net cash used for operating activities 2. Prepare the investing activities section of the statement of cash flows for Laporte Inc. for the year ended December 31, 2017. (Negative answers should be indicated by a minus sign. Enter your answers in millions.) LAPORTE INC Statement of Cash Flows (Partial) For the Year Ended December 31, 2017 Cash flows from investing activities: Net cash flow from investing activities Compute each of the following for the year 2017: (a) quality of earnings ratio, (b) capital expenditures ratio, and (c) free cash flow. (Negative answers should be indicated by a minus sign. Round Ratio" answers to 2 decimal places.) (a) Quality of earnings ratio (b) Capital expenditures ratio (c) Free cash flow 4. Based on your answers to (1.) and (2.) above, determine the net cash flow from financing activities. (Hint: This can be done without preparing the financing activities section of the statement.) (Enter your answer in millions.) ash flow from financing activities 5. The president of Laporte Inc., Tanya Turcotte, was provided with a copy of the operating activities section of the statement of cash flows that you prepared in 1.), and made the following comment: "This report is supposed to show operating cash inflows and outflows during the year, but I don't see how much cash Laporte Inc. received from customers and how much it paid to trade suppliers and for income taxes. Please ask whoever prepared this statement to provide me with these numbers." Based on Tanya's comment, compute the following amounts for 2017: (Enter your answers in millions.) a. Cash collected from customers b. Cash paid to trade suppliers c. Cash paid for income taxes References eBook & Resources