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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 | $ |
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