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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 | $ | 151.20 | ||
Cost of goods sold | (90.60) | |||
Gross margin | 60.60 | |||
Salaries expense | $ | 21.20 | ||
Insurance expense | 13.20 | |||
Depreciation expense | 5.60 | |||
Interest expense | 6.60 | (46.60) | ||
Gains and losses: | ||||
Gain on sale of equipment | 13.20 | |||
Loss on sale of land | (4.20) | |||
Income before tax | 23.00 | |||
Income tax expense | (11.50) | |||
Net income | $ | 11.50 | ||
Reconciliation of Net Income to Net Cash Flows from Operating Activities | ||
Net income | $ | 11.50 |
Adjustments for noncash effects: | ||
Decrease in accounts receivable | 5.60 | |
Gain on sale of equipment | (13.20) | |
Increase in inventory | (6.60) | |
Increase in accounts payable | 9.60 | |
Increase in salaries payable | 3.60 | |
Depreciation expense | 5.60 | |
Decrease in bond discount | 3.30 | |
Decrease in prepaid insurance | 2.60 | |
Loss on sale of land | 4.20 | |
Increase in income tax payable | 6.60 | |
Net cash flows from operating activities | $ | 32.80 |
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 paid to employeesTo bondholdersCash paid for income taxesCash paid for insuranceCash received from customersFor depreciation expenseCash paid to suppliersCash paid for interest | $ |
(Click to select)For depreciation expenseCash paid for interestCash paid for insuranceCash paid to suppliersCash paid for income taxesTo bondholdersCash received from customersCash paid to employees | |
(Click to select)Cash paid for insuranceCash received from customersCash paid to employeesCash paid to suppliersFor depreciation expenseCash paid for income taxesCash paid for interestTo bondholders | |
(Click to select)Cash paid for interestCash received from customersCash paid for income taxesTo bondholdersFor depreciation expenseCash paid to employeesCash paid to suppliersCash paid for insurance | |
(Click to select)To bondholdersCash received from customersCash paid for income taxesCash paid to suppliersCash paid to employeesCash paid for interestFor depreciation expenseCash paid for insurance | |
(Click to select)Cash paid to employeesCash received from customersCash paid to suppliersCash paid for interestCash paid for income taxesTo bondholdersFor depreciation expenseCash paid for insurance | |
Net cash flows from operating activities | $ |
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