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1. Prepare the cash flow from operating activities section of the statement of cash flows for 1999.

Use Indirect method. CAMEL CORPORATION Balance Sheet as at December 31, 1999 ASSETS CURRENT Cash Accounts receivable Temporary investments Merchandise inventory 1999 1998

$ 24,000 $ 33,400 89,600 106,300 80,000 35,000 106,100 122,700 299,700 297,400 415,000 54,500 360,500 $660,200 285,000 91,000 194,000 $491,400

PROPERTY, PLANT & EQUIPMENT Accumulated amortization

LIABILITIES CURRENT Accounts payable Unearned revenue Income taxes payable LONG TERM DEBT Bonds payable SHAREHOLDERS= EQUITY COMMON SHARES RETAINED EARNINGS

$ 64,000 $ 96,400 16,000 49,000 35,000 129,000 131,400 175,000 140,000

140,000 140,000 216,200 80,000 356,200 220,000 $660,200 $491,400

CAMEL CORPORATION Income Statement for the year ended December 31, 1999 Sales Cost of goods sold Gross profit Operating expenses Advertising and promotion Amortization expense Office supplies Repairs and maintenance Salaries and benefits Utilities Operating income $870,000 425,300 444,700 12,200 28,500 4,200 18,100 127,500 39,000 229,500 215,200

Other items Gain on sale of equipment Income before taxes Income taxes Net income

35,000 250,200 74,000 $176,200

Additional data about transactions included in the above financial statements: 1) Cash dividends of $40,000 were declared and paid during 1999. 2) Equipment that initially cost $90,000 and had a book value of $25,000 was sold for $60,000 in 1999. 3) Equipment was purchased during the 1999 at a cost of $220,000. 4) Temporary investments of $45,000 were purchased during 1999, and are not included in the definition of cash and cash equivalents. 5) Bonds with a face value of $35,000 were issued for cash during the year. Section C (50 marks) (Attempt all questions. Every question carries 10 marks) Read the case Cash Flows at Disney and answer the following questions. Cash Flows at Disney The following cash flows were reported by The Walt Disney Company and Subsidiaries for 1998 (stated in millions): Net Income $1,850 Items Not Requiring Cash Outlays: Amortization of film and television costs Depreciation Amortization of intangible assets Other Changes In: Receivables Inventories Other assets Accounts and taxes payable and accrued liabilities Film and television coststelevision broadcast rights Deferred income taxes 3,265 Cash Provided by Operations 5,115 (664) (46) 179 218 (447) 346 2,514 809 431 (75)

Investing Activities: Film and television costs Investments in theme parks, resorts, and other property Acquisitions Proceeds from sales of marketable securities and other investments Purchase of marketable securities Investment in and loan to Entertainment (5,665) Financing Activities: Borrowings Reduction of borrowings Repurchases of common stock Dividends Exercise of stock options and other 360 Decrease in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year $ Question: 1. Is Disneys reported net income a good measure of total cash provided by operations in 1998? What proportion of total cash provided by operations does it represent? 2. What proportion of the adjustments to net income used in computing cash provided by operations is represented by depreciation and amortization? 3. Did Disneys additional investment in film and television and theme parks, resorts, and other property exceed depreciation and amortization for the year? By what amount? 4. What portion of the amount invested in film and television and theme parks, resorts, and other property was generated by issuing new long-term debt and common stock? 5. How does the information on cash provided (used) by investing activities and financing activities help investors to evaluate a company such as Disney? (190) 317 127 1,830 (1,212) (30) (412) 184 (3,335) (2,314) (213) 238 (13) (28)