Question

The Plastic Lumber Company, Inc., (PLC) is a manufacturer that takes in post- consumer plastics (i. e., empty milk jugs) and recycles those plastics into a “plastic lumber” that can be used to build furniture, decking, and a variety of other items. Because Plastic Lumber has a strong focus on sustainability, the company managers try, whenever possible, to use recycled materials and to invest in sustainable projects.
Last year, the company engaged in several sustainable practices that have an impact on its cash flows. For each of the transactions listed below, indicate whether the trans­action would have affected the operating, investing, or financing cash flows of the company. Additionally, indicate whether each transaction would have increased (+) or decreased (-) cash.
Transactions:
1. PLC built a new building for its manufacturing facility. The new building is LEED ­certified and was paid for with cash.
2. Engineers and scientists at PLC performed research into whether another kind of ­post- consumer plastic not currently used in its plastics extrusion process could be used.
3. Solar panels were installed on PLC’s administrative offices to supply part of the ­electricity needed for its operations.
4. PLC issued common stock during the year to help finance growth.
5. New production equipment that is 50% more energy efficient than the old equipment was purchased for cash.
6. Six Honda Civic Hybrid automobiles were purchased for the use of the sales staff.
7. PLC became a minority partner in a wind- turbine project by investing $ 1 million in cash in the project.
8. PLC sold plastic scrap generated by its manufacturing process.
9. Throughout the year, PLC participated in several trade shows that featured green products for use by parks and recreation facilities. For each trade show, PLC incurred cash expenses for transportation, registration, meals and lodging, and booth setup.
10. A new delivery truck that uses biofuel was purchased for cash.




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  • CreatedAugust 27, 2014
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