a) For each of the following transactions: o indicate whether it will result in

Question

a) For each of the following transactions: o indicate whether it will result in an increase(+), decrease (, or have no effect (NE) on cash flows classify each of the transactions as an operating (O), investing (I), financing (F), or significant noncash investing/financing (NC) activity or no effect (NE) o Classification Impact (tor (E(NC or (NE) Repayment of mortgage payable Payment of interest on mortgage Purchase of land in exchange for common shares- Issue of preferred shares for cash. Collection of accounts receivable Declaration of cash dividend Payment of cash dividend Cash purchase of inventory . b) Selected information (CAD millions) are presented for two firms ROP and DUL operating in the same industries: DUL ROH Net income Net cash provided by operating activities Net cash provided (used) by investing activities Net cash provided (used) by financing activities 4,529, $ 161 , 6,539 212 35 (1,420) . 735 (176) 5,854S71 2,078267 Net increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year 7,932 S 338 Reauired o Compare and discuss the performance/activity the two firms based on the above cash flow and net income information. Which firm appears to be in a stronger cash position. Why?»

Explanation / Answer

a) Impact (+), () or (NE) Classification (O), (I), (F), (NC) or (NE) Repayment of mortgage payable - F Payment of interest on mortgage - O Purchase of land in exchange for common shares NE NC Issue of preferred shares for cash + F Collection of accounts receivable + O Declaration of cash dividend NE NE Payment of cash dividend - F Cash purchase of inventory - O

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