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Required information [The following information applies to the questions displayed below.] Green Brands, Incorporated (GBI) presents its statement of cash flows using the indirect method.
Required information [The following information applies to the questions displayed below.] Green Brands, Incorporated (GBI) presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from GBI's Year 2 and Year 1 year-end balance sheets: Accounts receivable Account Title Merchandise inventory Prepaid insurance Accounts payable Salaries payable Unearned service revenue Year 2 Year 1 $ 23,900 $ 26,900 56,100 51,800 15,100 27,000 26,800 16,600 4,950 4,000 700 2,900 The Year 2 Income statement is shown next: Sales Income Statement Cost of goods sold Gross margin Service revenue Insurance expense Salaries expense Depreciation expense Operating income Gain on sale of equipment Net income- $ 614,000 (369,000) 245,000 4,100 (39,000) (144,000) (4,800) 61,300 4,500 $ 65,800 b. Prepare the operating activities section of the statement of cash flows using the indirect method for Year 2. Note: Amounts to be deducted should be indicated with a minus sign. GREEN BRANDS, INCORPORATED Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Add: Deduct Add: noncash expenses Net cash flow from operating activities
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