Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 8

Cash flows from operating, investing, and financing activities-direct method The following information is available from Gray Co.'s accounting records for the year ended December 31, 2016 (amounts in millions):

Required:
a. The net cash provided by operating activities for Gray Co. for the year ended December 31, 2016, is $1,800 million. Calculate the cash paid to suppliers and employees.
b. The increase in cash for the year was $400 million. Calculate the amount of cash used to purchase buildings and equipment. Your answer to part a should be considered in your calculation. (Hint: Set up a model of the statement of cash flows to determine the net cash provided [used] by operating and investing activities, and then solve for the missing amounts.)