Each of the following events affects one or more tables in Sections 29-2 to 29-3. Show the effects of each event by adjusting the tables listed in parentheses:

a. Dynamic repays only $10 million of short-term debt in 2012. (Tables 29.2 and 29.3)

b. Dynamic issues an additional $40 million of long-term debt in 2012 and invests $25 million in a new warehouse. (Tables 29.1 - 29.3)

c. In 2012 Dynamic reduces the quantity of stuffing in each mattress. Customers don't notice, but operating costs fall by 10%. (Tables 29.1 - 29.3)

d. Starting in the third quarter of 2013, Dynamic employs new staff members who prove very effective in persuading customers to pay more promptly. As a result, 90% of sales are paid for immediately and 10% are paid in the following quarter. (Tables 29.4 and 29.5)

e. Starting in the first quarter of 2013, Dynamic cuts wages by $20 million a quarter. (Table 29.5)

f. In the second quarter of 2013 a disused warehouse catches fire mysteriously. Dynamic receives a $50 million check from the insurance company. (Table 29.5)

g. Dynamic's treasurer decides he can scrape by on a $10 million operating cash balance. (Table 29.5)

TABLE 29.1

TABLE 29.2

TABLE 29.3

TABLE 29.4

TABLE 29.5

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Sales Cost of goods sold Other expenses Depreciation EBIT (1-2-3-4 Interest Pretax income (5-6) Tax at 50% Net income (7-8) 2,200 1,644 411 20 125 5 120 60 60 Dividend Earnings retained in the business 30 30 2012 2011 Current assets: 150 125 125 130 Accounts receivable Total current assets Fixed assets: Gross investment 100 250 575 240 515 Net fixed assets Total assets Current liabilities: Bank loans 135 135 110 135 Accounts payable Total current liabilities Long-term debt Net worth (equity and retained eamings) Total liabilities and net worth 575 515 Net income Depreciation Decrease (increase) in accounts receivable Decrease (increase) in inventories Increase (decrease) in accounts payable 60 20 25 Net cash flow from operating activities 85 Cash flows from investing activities: Investment in fixed assets 30 Cash flows from financing activities: Dividends 30 Sale (purchase) of marketable securities-25 Increase (decrease) in long-term debt Increase (decrease) in short-term debt 30 25 Net cash flow from financing activities Increase (decrease) in cash balance Receivables at start of Sales First Quarter 150 560 Second Quarter 199 502 Third Quarter 181.6 742 Fourth Quarter 253.6 836 351.4 168 519.4 181.6 519.4 150.6 670 253.6 Sales in current 392 119a 511 199 585.2 Sales in last Total collections 807.8 281.8 Receivables at end of period 1+2-3 First Quarter Second Quarter Third Quarter Fourth Quarter Sources of cash: 519.4 807.8 Collections on accounts receivable 747 807.8 Total sources Uses of cash: Payments on accounts payable Increase in Labor and other expenses 261 180 136 150 170 136 136 136 Taxes, interest, and dividends -141 -72.6 120 170.3 Sources minus uses Calculation of short-term borrowing requirement: -116 -188.6 Cash at start of period -141 120 170.3 in cash balanca -116 -188.6 -68.6 101.7 Cash at end of period Minimum operating balance Cumulative financing required 213.6 93.6 -76.7 141