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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.
Required information
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[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 | $ | 960 | |||||
Cost of goods sold | 380 | ||||||
Gross margin | 580 | ||||||
Operating expenses: | |||||||
Salaries | $ | 238 | |||||
Depreciation | 196 | ||||||
Loss on sale of land | 12 | ||||||
Total operating expenses | 446 | ||||||
Operating income | 134 | ||||||
Other income (expense): | |||||||
Gain on sale of cash equivalents | 4 | ||||||
Interest expense | (46 | ) | |||||
Income before tax | 92 | ||||||
Income tax expense | 46 | ||||||
Net income | $ | 46 | |||||
HAWKEYE COMPANY | |||||||||
Selected Accounts from Comparative Balance Sheets | |||||||||
December 31, 2021 and 2020 ($ in millions) | |||||||||
Year | |||||||||
2021 | 2020 | Change | |||||||
Cash | $ | 224 | $ | 206 | $ | 18 | |||
Accounts receivable | 401 | 433 | (32 | ) | |||||
Inventory | 872 | 856 | 16 | ||||||
Accounts payable | 216 | 246 | (30 | ) | |||||
Salaries payable | 186 | 200 | (14 | ) | |||||
Interest payable | 67 | 56 | 11 | ||||||
Income tax payable | 96 | 116 | (20 | ) | |||||
Required: 1. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the direct 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.)
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