C13-40 Analyze a statement of cash flows (Learning Objective 1) This case is a c

Question

C13-40 Analyze a statement of cash flows (Learning Objective 1) This case is a continuation of the Caesars Entertainment Corporation serial case that be gan in Chapter 1. Refer to the introductory story in Chapter 1 (see page 43) for additional background. (The components of the Caesars serial case can be completed in any order) Following are the consolidated statements of cash flows for Caesars Entertainment Corporation for the years ended December 31, 2012 through 2014 Caesars Entertainment Corporation Consolidated Statements of Cash Flows (condensed and adapted in millions Year Ended December 31 2014 2013 2012 Cash flows from operating activities Net loss s (2,866) $ (2,940) $(1,503) Adjustments to reconcile cash flows 1,536 Cash flows from operating activities (735) (99) Cash flows from investing activities Acquisitions of property and equipment Other investing activities (998)(726) 309 (689) (507) 791 Cash flows from investing activities 65 (1,225 Cash flows from financing activities Proceeds from inssuance of long-term debt Repayments of long-term debt Other financing activities 4.436 6,039 4,162 (2,833) (6,605) (2,661) 1,217 (89) (28) 1,473 281 Cash flows from financing activities 90 61 Net cash flows from operating, investing, and financing Other adjustments to cash Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period 586 867 1,758 2,771 $ 2,806$2,771 $1,758 Questions 1. Looking at the statements of cash flows above, which activity has generated the most 2. Now switch to thinking about Caesars's renovation of its hotel tower in Caesars cash for Caesars? Palace Las Vegas. How would the renovation expenditures be reported in the statement of cash flows? After completion, how should the interest, on the renovation cost, be reported n statement of cash flows? a. adap

Explanation / Answer

1. Looking at the statement of cash flow, ceesar genearting most cash flow from financing activity. it is $1514.

2. renovation expenditure is a capital expenditure. since it will increase the future eonomic life of hotel. so it will come under investing activity. it will result in cash outflow.

3. interest on the renovation cost is included in financing activity because we are taking finance from any source for renovation.

3.

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