The following information is available from Gray Co.'s accounting records for the year ended December 31, 2010 (amounts in million):
Cash dividends declared and paid - $350
Retirement of bonds payable at maturity - $200
Interest and taxes paid - $150
Proceeds of common stock issued - $550
Proceeds from the sale of land - $125
Collections from customers - $3,175
Cash paid to suppliers and employees - ?
Purchase of buildings and equipment - ?
Required:
Q1. The net cash provided by operating activates for Gray Co. for the year ended December 31, 2010, is $1,225 million. Calculate the cash paid to suppliers and employees.
Q2. The increase in cash for the year was $250 million. Calculate the amount of cash used to purchase buildings and equipment. Answer to part (a) should be considered in your calculation. (Hint: Set up a model of the statement of cash flows to determine the net cash provided (used) by operating and investing activities, and then solve for the missing amounts.)