Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The income statement and a schedule reconciling cash flows from operating activities to net income are provided below ($ in millions) for Mike Roe Computers.

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, 2013
Sales $ 150.40
Cost of goods sold (90.20)
Gross margin 60.20
Salaries expense $ 20.40
Insurance expense 12.40
Depreciation expense 5.20
Interest expense 6.20 (44.20)
Gains and losses:
Gain on sale of equipment 12.40
Loss on sale of land (3.40)
Income before tax 25.00
Income tax expense (12.50)
Net income $ 12.50

Reconciliation of Net Income to Net Cash Flows from Operating Activities
Net income $ 12.50
Adjustments for noncash effects:
Decrease in accounts receivable 5.20
Gain on sale of equipment (12.40)
Increase in inventory (6.20)
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

Required:
1.

Calculate each of the following amounts for Mike Roe Computers: (Enter your answers in millions of dollars rounded to 2 decimal places. Input all amounts as positive values.)

($ in millions)
a. Cash received from customers during the reporting period. $
b. Cash paid to suppliers of goods during the reporting period. $
c. Cash paid to employees during the reporting period. $
d. Cash paid for interest during the reporting period. $
e. Cash paid for insurance during the reporting period. $
f. Cash paid for income taxes during the reporting period. $

2.

Prepare the cash flows from operating activities section of the statement of cash flows (direct method).(Enter your answers in millions of dollars rounded to 2 decimal places.Amounts to be deducted should be indicated with a minus sign.)

($ in millions)
Cash Flows From Operating Activities:
(Click to select)Cash received from customersCash paid for insuranceCash paid to employeesTo bondholdersFor depreciation expenseCash paid to suppliersCash paid for interestCash paid for income taxes $
(Click to select)Cash received from customersCash paid for interestFor depreciation expenseCash paid for income taxesCash paid to employeesCash paid to suppliersCash paid for insuranceTo bondholders
(Click to select)Cash paid for interestCash received from customersCash paid to employeesCash paid for insuranceFor depreciation expenseCash paid for income taxesCash paid to suppliersTo bondholders
(Click to select)To bondholdersCash received from customersCash paid to suppliersCash paid for income taxesCash paid for interestCash paid to employeesFor depreciation expenseCash paid for insurance
(Click to select)Cash paid for insuranceCash paid for income taxesTo bondholdersCash received from customersFor depreciation expenseCash paid for interestCash paid to suppliersCash paid to employees
(Click to select)To bondholdersCash paid for income taxesCash paid to employeesCash received from customersCash paid to suppliersFor depreciation expenseCash paid for interestCash paid for insurance
Net cash flows from operating activities $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting An Introduction To Concepts Methods And Uses

Authors: Clyde P. Stickney, Roman L. Weil

8th Edition

0030182689, 978-0030182686

More Books

Students also viewed these Accounting questions

Question

What is Nutriens approach to handling personal information?

Answered: 1 week ago