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 had an impact on 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 sold plastic scrap generated by its manufacturing process.
2. 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 the roof of the PLC manufacturing facility to supply part of the electricity needed for its operations.
4. PLC bought its own stock back to use for the company’s 401K plan.
5. New production equipment that is 25% more energy efficient than the old equipment was purchased for cash.
6. A fleet of Toyota Prius hybrid automobiles was purchased for the use of the sales staff.
7. 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.
8. A new delivery truck that uses biofuel was purchased for cash.
9. PLC built a new office building as its administrative headquarters. The new building is LEED certified and was paid for with cash.
10. PLC became a minority partner in a wind- turbine project by investing $ 1 million in cash in the project.



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  • CreatedAugust 27, 2014
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