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The chief accountant for Grandview Corporation provides you with the company’s 2018 statement of cash flows and income statement. The accountant has asked for your help with some missing figures in the company’s comparative balance sheets. These financial statements are shown next ($ in millions).
GRANDVIEW CORPORATION
Statement of Cash Flows
For the Year Ended December 31, 2018Cash Flows from Operating Activities: Collections from customers$116 Payment to suppliers (41) Payment of general & administrative expenses (31) Payment of income taxes (22) Net cash flows from operating activities $22 Cash Flows from Investing Activities: Sale of investments 78 Cash Flows from Financing Activities: Issuance of common stock 12 Payment of dividends (4) Net cash flows from financing activities 8 Net increase in cash $108
GRANDVIEW CORPORATION
Income Statement
For the Year Ended December 31, 2018Sales revenue $132 Cost of goods sold 45 Gross profit 87 Operating expenses: General and administrative$31 Depreciation 23 Total operating expenses 54 Operating income 33 Other income: Gain on sale of investments 16 Income before income taxes 49 Income tax expense 10 Net income $39
GRANDVIEW CORPORATION
Balance Sheets
At December 31 2018 2017 Assets: Cash$177 $? Accounts receivable ? 97 Investments — 62 Inventory 73 ? Property, plant & equipment 163 163 Less: Accumulated depreciation (91) ? Total assets ? ? Liabilities and Shareholders’ Equity: Accounts payable to suppliers$55 $43 Payables for selling & admin. expenses 22 22 Income taxes payable 35 ? Common stock 255 243 Retained earnings ? 33 Total liabilities and shareholders’ equity ? ?
Required:
1. Calculate the missing amounts.
2. Prepare the operating activities section of Grandview’s 2018 statement of cash flows using the indirect method
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