Question

Refer to Problem, Feinstein Company, requirement 1. Support the operating section of your cash flow statement by using a form of the balance sheet equation.
In Problem, The Feinstein Company has assembled the accompanying balance sheets and statement of income and retained earnings for 20X4.
Feinstein Company
Balance Sheets as of December 31 (in millions)


Feinstein Company
Statement of Income and Retained Earnings for the Year Ended
December 31, 20X4 (in millions)


On December 30, 20X4, Feinstein paid $103 million in cash to acquire a new plant to expand operations. This was partly financed by an issue of long-term debt for $54 million in cash. Plant assets were sold for their book value of $6 million during 20X4. Because net income was $16 million, the highest in the company’s history, Isaac Feinstein, the chief executive officer, was distressed by the company’s extremely low cash balance.


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  • CreatedFebruary 20, 2015
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