Direct method. In millions Cash dividends declared and paid………………………………………….. $1

Question

Direct method. In millions

Cash dividends declared and paid………………………………………….. $1,050

Retirement of bonds payable at maturity……………………………… 600

Interest and taxes paid…………………………………………………………… 450

Proceeds of common stock issued…………………………………………. 1,650

Proceeds from the sale of land………………………………………………. 375

Collections from customers……………………………………………………. 9,525

Cash paid to suppliers and employees…………………………………… ?

Purchase of buildings and equipment……………………………………. ?

Net cash provided by operating activities 3,675 million.

A. The net cash provided by operating activities for Gray Co. for the year ended December 31, 2013 is $3,675 million. Calculate the cash paid to suppliers and employees.    B. The increase in cash for the year was $750 million. Calculate the amount of cash used to purchase buildings and equipment. Your answer to part A. should be considered in your calculation.

Explanation / Answer

Cash paid to suppliers and employees Particulars In millions Collections from customers 9,525 Less- Interest and taxes paid 450 Net cash provided by operating activities 3,675 Cash paid to suppliers and employees 5,400 Purchase of buildings and equipment Particulars In millions Net cash provided by operating activities 3,675 Less- Cash dividends declared and paid 1,050 Retirement of bonds payable at maturity 600 Increase in cash 750 Add- Proceeds of common stock issued 1,650 Proceeds from the sale of land 375 Purchase of buildings and equipment 3,300

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