Exercise 4-12 Construction of cash flow statement (LO4-5) Holmes Company reported the following balance sheets at December 31, 20X2 and 20X1: ($ in millions) December 31, 20X2 20X1 Cash $ 45 $ 40 Accounts receivable 170 175 Inventory 250 230 Fixed assets 500 400 Accumulated depreciation (150 ) (120 ) Total assets $ 815 $ 725 Accounts payable $ 100 $ 80 Long-term debt 455 425 Common stock 50 50 Retained earnings 280 200 Treasury stock (70 ) (30 ) Total liabilities and stockholders' equity $ 815 $ 725 Its income statement for 20X2 was as follows: ($ in millions) Sales $ 1,000 Cost of sales (670 ) Depreciation (30 ) Other operating expenses (100 ) Income before taxes 200 Income taxes (42 ) Net income $ 158 Additional information: During 20X2, Holmes had the following transactions: Declared and paid a common dividend of $78 million. Purchased additional fixed assets, but did not sell any. Issued $30 million of new debt. Paid interest on all its debt, and included the interest in Other operating expenses. Repurchased common shares, but did not issue any. Required: Prepare a cash flow statement for Holmes for 20X2, using the indirect method to present the operating section. For your calculations, it may be helpful to use the worksheet approach described in the chapter appendix to construct the cash flow statement. (Net cash outflows and amounts to be deducted should be indicated by a minus sign. Enter your answers in millions.)

Alpha company uses the periodic inventory system for purchase & sales of merchandise. discount terms for both purchases & sales are, 2/10, n30 and the gross method is used. unless otherwise noted, fob destination will apply to all purchases & sales. the value of inventory is based on periodic system. on january 1, 2016, beginning inventory consisted of 350 units of widgets costing $10 each. alpha prepares monthly income statements. the following events occurred during the month of jan.: dateactivitya.jan. 3purchased on account 350 widgets for $11 each.b.jan. 5sold on account 400 widgets for $30 each. paid freight out with petty cash of $150.c.jan. 10purchased on account 625 widgets for $12 each.d.jan. 11shipping cost for the january 10 purchased merchandise was $400 was paid with a cheque by alpha directly to the freight company.e.jan. 12returned 50 widgets received from jan. 10 purchase as they were not the correct item ordered.f.jan. 13paid for the purchases made on jan. 3.g.jan. 21sold on account 550 widgets for $30 each. paid freight out with petty cash of $250.h.jan. 22authorize credit without return of goods for 50 widgets sold on jan. 21 when customer advised that they were received in defective condition.i.jan. 25received payment for the sale made on jan. 5.j.jan. 26paid for the purchases made on jan. 10.k.jan. 31received payment for the sale made on jan. 21.use this information to prepare the general journal entries (without explanation) for the january events. if no entry is required then enter the date and write "no entry required."