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, 2021
($ in millions)
Sales				$	1,000
Cost of goods sold					400
Gross margin					600
Operating expenses:
Salaries	$	242
Depreciation		200
Loss on sale of land		10
Total operating expenses					452
Operating income					148
Other income (expense):
Gain on sale of cash equivalents					4
Interest expense					(50	)
Income before tax					102
Income tax expense					51
Net income				$	51

HAWKEYE COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2021 and 2020 ($ in millions)
	Year
	2021			2020			Change
Cash	$	232		$	210		$	22
Accounts receivable		405			441			(36	)
Inventory		880			860			20
Accounts payable		220			254			(34	)
Salaries payable		190			208			(18	)
Interest payable		75			60			15
Income tax payable		100			124			(24	)

Required: 2. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the indirect method. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.)