Question
The income statement and a schedule reconciling cash flows from operating activities to net income are provided below ($ in 000s) for Peach Computers. PEACH
The income statement and a schedule reconciling cash flows from operating activities to net income are provided below ($ in 000s) for Peach Computers.
PEACH COMPUTERS Income Statement For the Year Ended December 31, 2018 | |||||||
Sales | $ | 440.0 | |||||
Cost of goods sold | (220.0 | ) | |||||
Gross margin | 220.0 | ||||||
Salaries expense | $ | 51.0 | |||||
Insurance expense | 28.0 | ||||||
Depreciation expense | 13.0 | ||||||
Loss on sale of land | 11.0 | 103.0 | |||||
Income before tax | 117.0 | ||||||
Income tax expense | (58.5 | ) | |||||
Net income | $ | 58.5 | |||||
Reconciliation of Net Income To Net Cash Flows from Operating Activities | |||
Net income | $ | 58.5 | |
Adjustments for Noncash Effects | |||
Depreciation expense | 13.0 | ||
Loss on sale of land | 11.0 | ||
Changes in operating assets and liabilities: | |||
Decrease in accounts receivable | 15.0 | ||
Increase in inventory | (58.0 | ) | |
Decrease in accounts payable | (35.0 | ) | |
Increase in salaries payable | 23.0 | ||
Decrease in prepaid insurance | 13.5 | ||
Increase in income tax payable | 54.7 | ||
Net cash flows from operating activities | $ | 95.7 | |
Required: 1. Calculate each of the following amounts for Peach Computers: 2. Prepare the cash flows from operating activities section of the statement of cash flows (direct method).
|
Prepare the cash flows from operating activities section of the statement of cash flows (direct method). (Enter your answers in thousands rounded to 1 decimal place (i.e., 5,500 should be entered as 5.5). Amounts to be deducted should be indicated with a minus sign.)
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started