The following information has been reported by Laporte Inc. on its statements of financial position at December

Question:

The following information has been reported by Laporte Inc. on its statements of financial position at December 31, 2013 and 2014, and on its statement of earnings for the year ended December 31, 2014. Amounts are in millions of dollars:

Additional information is as follows:
a. Old equipment was sold for cash during 2014. It had an original cost of $ 40 and an accumulated depreciation of $ 28.
b. A new building was acquired during the year in exchange for a long- term note for $ 60, payable in five years. In addition, new equipment was purchased for cash.
Required:
1. Prepare the operating activities section of the statement of cash flows for Laporte Inc. for the year ended December 31, 2014. Use the indirect method to report the cash flow from operations.
2. Prepare the investing activities section of the statement of cash flows for Laporte Inc. for the year ended December 31, 2014.
3. Compute and explain each of the following for the year 2014: (a) quality of earnings ratio, (b) capital expenditures ratio, and (c) free cash flow.
4. Based on your answers to (1) and (2) above, determine the net cash flow from financing activities. (Hint: This can be done without preparing the financing activities section of the statement.)
5. The president of Laporte Inc., Tanya Turcotte, was provided with a copy of the operating activities section of the statement of cash flows that you prepared in (1), and made the following comment: €œThis report is supposed to show operating cash inflows and outflows during the year, but I don€™t see how much cash Laporte Inc. received from customers and how much it paid to trade suppliers and for income taxes. Please ask whoever prepared this statement to provide me with these numbers.€ Based on Tanya€™s comment, compute the following amounts for 2014:
a. Cash collected from customers.
b. Cash paid to trade suppliers.
c. Cash paid for income taxes.