The income statement and a schedule reconciling cash flows from operating activities to net income are provided below for Mike Roe Computers. Sales MIKE ROE COMPUTERS Income Statement For the Year Ended December 31, 2021 Cost of goods sold Gross margin Salaries expense Insurance expense ($ in millions) Depreciation expense Interest expense Gains and losses: Gain on sale of equipment Loss on sale of land Income before tax Income tax expense Net income $150 (90) 60 $ 20 12 5 6 (43) 12 (3) 26 (13) $ 13 Net income Reconciliation of Net Income to Net Cash Flows from Operating Activities (5 in millions) Adjustments for noncash effects: Decrease in accounts receivable Gain on sale of equipment Increase in inventory Increase in accounts payable Increase in salaries payable Depreciation expense Decrease in bond discount Decrease in prepaid insurance Loss on sale of land Increase in income tax payable Net cash flows from operating activities $ 13 (12) (6) 9 3 5 3 2 3 $ 31