The income statement and a schedule reconciling cash flows from operating activities to net income are provided below (S in 000s) for Peach Computers. PEACH COMPUTERS Income Statement For the Year Ended December 31, 2016 $ 335.0 Cost of goods sold (134.0) Gross margin 201.0 $37.0 14.0 Insurance expense Depreciation expense Loss on sale of land 4.0 61.0 Income before tax Income tax expense 140.0 (70.0) Net income $ 70.0 Reconciliation of Net Income To Net Cash Flows from Operating Activities Net income Adjustments for Noncash Effects Depreciation expense Loss on sale of land Changes in operating assets and $ 70.0 4.0 liabilities: Decrease in accounts receivable Increase in inventory Decrease in accounts payable Increase in salaries payable Decrease in prepaid insurance Increase in income tax payable 8.0 (23.0) (14.0) 9.0 67.6 Net cash flows from operating activities $137.6