Newport Steam Corporation's balance sheet accounts as of December 31,19X8, and December 31, 19x9, and the information relating to the 19x9 activities, are presented below.
|
|
December 31
|
|
19x9
|
19x8
|
|
ASSETS
|
|
|
|
Cash
|
$ 230,000
|
$ 100,000
|
|
Short-Term Investments
|
300,000
|
0
|
|
Accounts Receivable (net)
|
550,000
|
550,000
|
|
Inventory
|
680,000
|
600,000
|
|
Long-Term Investments
|
200,000
|
300,000
|
|
Plant Assets
|
1,700,000
|
1,000,000
|
|
Accumulated Depreciation
|
(450,000)
|
(450,000)
|
|
Goodwill
|
90,000
|
100,000
|
|
Total Assets
|
$3,300,000
|
$2,200,000
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
Accounts Payable
|
$ 825,000
|
$ 720,000
|
|
Long-Term Debt
|
325,000
|
0
|
|
Common Stock, $1 Par
|
800,000
|
700,000
|
|
Additional Paid-in Capital
|
370,000
|
250,000
|
|
Retained Earnings
|
980.000
|
530,000
|
|
Total Liabilities and Stockholders' Equity
|
$3,300,000
|
$2,200,000
|
Information relating to 19x9 activities is as follows:
(1) Net income for 19x9 was $700,000.
(2) Purchase of short-term investments for $300,000, which will mature on 30, 20 0.
(3) Cash dividends declared and paid in 19x9 worth $250,000.
(4) Equipment costing $400,000, having accumulated depreciation of $250,000, was sold in 19x9 for $150,000.
(5) Plant assets worth $1,100,000 were purchased for cash.
(6) A long-term investment costing $100,000 was sold for $135,000.
(7) 100,000 shares of $1-par-value common stock were sold for $2.20 a share.
(8) Amortization of goodwill for 19x9 was $10,000.
Calculate Newport's net cash inflows or outflows for (a) operating, (b)investing, and (c) financing activities. Discuss whether or not the short-term investments are cash equivalents.