A comparative balance sheet and an income statement for Blankley Company are pre

Question

A comparative balance sheet and an income statement for Blankley Company are presented below Blankley Company Comparative Balance Sheet (dollars in millions) Ending Beginning Balance Balance Assets Current assets Cash and cash equivalents Accounts receivable Inventory $ 53 109 714 780 720 1,553 1,645 Total current assets 1,489 Property, plant, and equipment 1,610 693 917 52,344 $2,406 854 Less accumulated depreciation Net property, plant, and equipment Total assets Liabilities and Stockholders' equity 791 Current liabilities Accounts payable $ 288 174 156 86 194 105 Accrued liabilities Income taxes payable 587 485 416 740 Total current liabilities Bonds payable Total liabilities Stockholders' equity 1,072 1,156 215 215 Common stock Retained earnings 1,057 1,272 52,344 1,035 1,250 2,406 Total stockholders' equity Total liabilities and stockholders' equity

Explanation / Answer

Statement of Cash Flows:

Operating Activities: Net Income for the year (Retained earnings (1057 - 1035) $22 Add: Adjustments: Add Depreciation (854 - 693) $161 Less Profit on sale of equipment (2) Less Increase in Accounts Receivable (780 - 714) (66) Less Increase in Inventory (720 - 666) (54) Add increase in Accounts Payable (288 - 174) 114 Add increase in accrued liabilities ( 194 - 156) 38 Add Incrasae in Income Tax Payable (105 - 86) 19 210 Net Cash inflow from Operating activities 232 Investing Activities: Less: Purchase of Equipment (1645 - 1610) (35) Add Profit on sale of equipment 2    Net Cash outflow from Investing activities (33) Financing Activities: Less Payment to Bonds(740 - 485) (255) Net Cash outflow from Financing activities (255) Cash outflow of all activities (56) Opening Balance of Cash and cash equivalents $109 Closing Balance of Cash and cash equivalents $53

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