The income statement of Booker T Industries Inc. for the current year ended June 30 is as follows: 5511,000 Cost of goods 1290.500) Gross profit $220.500 Operating expenses Depreciation expense 50.300 Operating experie 105.000 Total operating expenses Income before income tax 57.100 Income tax expense (21,700) Niet income $54.500 Changes in the balances of selected accounts from the beginning to the end of the current year are as follows: Increase/ Decrease Accounts receivable et 21.760) 3,920 (3.780 Accounts payable (merchandise (7.80 Accruedene ble ferating expenses 1,200 Income tax payable a. Prepare the "Cash Flows from Operating Activities section" of the statement of cash flows, using the direct method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Hooker Industries Inc. Cash Flows from Operating Activities Section For the year ended on June 30 Cashflows from operating activities ut cash womerating cu b. What does the direct method show about a company's cash flows from operating activities that is not shown using the indirect method? With the the cash received less the cash payments is the net cash flow from operating activities. Individual cash receipts and payments are reported in the Cash Flows from Operating Activities section. The adjusts accrual basis net income for revenues and expenses that do not involve the receipt or payment of cash to arrive at cash flows from operating activities. Analyze and compare Apple, Coca-Cola, and Verizon Financial information for Apple Inc. (AAPL), The Coca-Cola Company (KO), and Verizon Communications (V2) follows (in millions): Apple Coca-Cola Veriton Sales 5215,63 41,13 $125.000 Cashflows from operating activities 65.624 8.796 22,715 Cash used to purchase property, plant, det 22,7363 12,262) (17.059 a. Compute the free cash flow for each company. Enter answers in millions Apple: Coca-Cola: Verizon: $ b. Compute the ratio of free cash flow to sales for each company. Round to one decimal place. Apple: Coca-Cola: Verizon: c. Which company has the greatest free cash flow? d. How does Verizon differ from the other two companies? 1. Over 75% of Verizon's cash flows are used to purchase PP&E, a percentage much greater than is used by the other two companies. Industries such as airlines, railroads, and telecommunications companies must invest heavily in new equipment to remain competitive. Such investments can Significantly reduce free cash flow. 2. 20% of Verizon's cash flows are used to purchase PP&E, a percentage much lesser than is used by the other two companies. Industries such as airlines, railroads, and telecommunications companies must invest heavily in new equipment to remain competitive. Such investments can significantly reduce free cash flow. 3. Over 75% of Verizon's cash flows are used to purchase PP&E, a percentage much greater than is used by the other two companies. Industries such as airlines, railroads, and telecommunications companies must invest heavily in new equipment to remain competitive. However this does not reduce free cash flow