Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pizza International, Incorporated, reported the following information (in thousands): Operating Activities Net Income Depreciation Increase in receivables Decrease in inventory Increase in prepaid expenses Decrease

image text in transcribed

Pizza International, Incorporated, reported the following information (in thousands): Operating Activities Net Income Depreciation Increase in receivables Decrease in inventory Increase in prepaid expenses Decrease in accounts payable Increase in accrued liabilities Decrease in income taxes payable Payments on notes payable Cash paid for equipment $ 100 33,305 170 643 664 8,720 719 2,721 12,691 29,073 The following is the summarized income statement for Pizza International, Incorporated in thousands): Revenues Cost of Sales Gross Profit Salary and Wages Expense Depreciation Office Expense Net Income before Income Tax Expense Income Tax Expense Net Income $ 143,551 45,500 98,051 56,835 33,305 7,781 130 30 $ 100 Required: 1. Based on this information, compute cash flow from operating activities using the direct method. Assume Prepaid Expenses and Accrued Liabilities relate to office expenses. 2. What was the primary reason that Pizza International was able to report large positive cash flow from operations despite nearly having a net loss? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Based on this information, compute cash flow from operating activities using the direct method. Assume Prepaid Expenses and Accrued Liabilities relate to office expenses. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands.) PIZZA INTERNATIONAL, INCORPORATED Cash Flows from Operating ActivitiesDirect Method (in thousands) $ 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting

Authors: Carl S. Warren, Philip E. Fess, James M. Reeve, C.Rollin Niswonger, Jim Reeve

18th Edition

0538839333, 978-0538839334

More Books

Students also viewed these Accounting questions