the options are: 
The following information has been reported by Laporte Inc. on its statements of financial position at December 31, 2019 and 2020 and on its statement of earnings for the year ended December 31, 2020. Amounts are in millions of dollars: Statements of Financial Position 2020 $ 120 52 42 2019 $ 76 40 48 34 170 (80) $ 288 201 (60 $ 355 Total assets $ 40 7 103 114 91 Cash Accounts receivable Merchandise inventory Long-term investments Property, plant, and equipment Accumulated depreciation Tot Accounts payable Income taxes payable Long-term borrowings Contributed capital Retained earnings Total liabilities and shareholders' equity Statement of Earnings Sales Cost of sales Gross profit Depreciation expense other operating expenses Earnings from operations Gain on sale investments Loss on sale of equipment Earnings before income tax Income tax expense Net earnings 54 8 43 100 83 $ 288 $ 355 $ 180 (108) 72 (10) (45) 17 17 (2) 21 8 13 $ Additional information is as follows: a. Old equipment was sold for cash during 2020. It had an original cost of $54 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, 2020 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, 2020 Cash flows from operating activities: Net earnings Add (deduct) items not affecting cash: $ 13 Net cash used for operating activities $ 13 Statement of Cash Flows (Partial) For the Year Ended December 31, 2020 Cash flows from operating activities: Net earnings Add (deduct) items not affecting cash: $ 13 Decrease in accounts payable Decrease in income tax payable Decrease in merchandise inventory Depreciation expense Net cash used for operating activities 13 LAPORTE INC. Statement of Cash Flows (Partial) For the Year Ended December 31, 2020 Cash flows from operating activities: Net earnings Add (deduct) items not affecting cash: $ 13 Decrease in merchandise inventory Depreciation expense Gain on sale of investments Increase in accounts receivable Loss on sale of equipment Net cash used for operating activities 13 2. Prepare the investing activities section of the statement of cash flows for Laporte Inc. for the year ended December 31, 2020. (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, 2020 Cash flows from investing activities: Net cash flow from investing activities $ 0 3. Compute each of the following for the year 2020: (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 2. Prepare the investing activities section of the statement of cash flows for Laporte Inc. for the year ended December 31, 2020. (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, 2020 Cash flows from investing activities: Cost of equipment sold $ 0 Purchase of equipment Sale of equipment Sale of long-term investment
