Item1

Part 1 of 2

5points

eBook

Print

References

Check my workCheck My Work button is now enabled100

Item 1

Required information

Skip to question

[The following information applies to the questions displayed below.]

Portions of the financial statements for Hawkeye Company are provided below.

HAWKEYE COMPANY
Income Statement
For the Year Ended December 31, 2024
($ in millions)
Sales		$ 850
Cost of goods sold		325
Gross margin		525
Operating expenses:
Salaries	$ 227
Depreciation	185
Loss on sale of land	12
Total operating expenses		424
Operating income		101
Other income (expense):
Gain on sale of cash equivalents		4
Interest expense		(35)
Income before tax		70
Income tax expense		35
Net income		$ 35

HAWKEYE COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2024 and 2023 ($ in millions)
	Year	Change
2024	2023
Cash	$ 242	$ 215	$ 27
Accounts receivable	390	411	(21)
Inventory	890	865	25
Accounts payable	225	264	(39)
Salaries payable	185	198	(13)
Interest payable	65	55	10
Income tax payable	95	114	(19)

Required:

1. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the direct method.

Portions of the financial statements for Hawkeye Company are provided below