The income statement and a schedule reconciling cash flows from operating activities to net income are provided below in millions) for Mike Roe Computers. MIKE ROE COMPUTERS Income Statement For the Year Ended December 31, 2016 $150.40 Sales Cost of goods sold (90.20) Gross margin 60.20 20.40 Salaries expense Insurance expense 12.40 Depreciation expense 5.20 Interest expense 6.20 (44.20) Gains and losses: 12.40 Gain on sale of equipment Loss on sale of land (3.40) Income before tax 25.00 (12.50) Income tax expense Net income 12.50 Reconciliation of Net Income to Net Cash Flows from Operating Activities 12.50 Net income Adjustments for noncash effects: Decrease in accounts receivable 5.20 (12.40) Gain on sale of equipment (6.20) Increase in inventory Increase in accounts payable 9.20 Increase in salaries payable 3.20 Depreciation expense 5.20 Decrease in bond discount 3.10 Decrease in prepaid insurance 2.20 Loss on sale of land 3.40 Increase in income tax payable 6.20 Net cash flows from operating activities 31.60