21-21 Cash flows from operating activities (direct method) derived from an income tatement; cash flows from operating activities (indirect method) The income statement and a schedule reconciling cash flows from operating activities to net income are provided below ($ in thousands) for Peach Computers. PEACH COMPUTERS Reconciliation of Net Income Income Statement To Net Cash Flows from Operating Activities For the Year Ended December 31, 2021 Net income $ 22 Sales $305 Adjustments for Noncash Effects Cost of goods sold 185 Depreciation expense 11 Gross margin 120 Loss on sale of land Salaries expense $41 Changes in operating assets and liabilities: Insurance expense 19 Decrease in accounts receivable 6 Depreciation expense 11 Increase in inventory (13) Loss on sale of land 76 Decrease in accounts payable (8) 44 Income before tax S Increase in salaries payable 22 9 Income tax expense Decrease in prepaid insurance Net income $ 22 Increase in income tax payable Net cash flows from operating activities $ 57 . i 20 13 8 Required: Calculate each of the following amounts for Peach Computers and record the proper journal entries: 37. a. Cash received from customers during the reporting period A) Summary Entry Cost of goods sold. 185 Inventory... Accounts payable... Cash (cash received from customers)... 206 B) 311 6 30 Summary Entry Cash (received from customers). Accounts receivable...... Sales revenue. Income tax expense. Income tax payable. Cash (paid for income taxes) Salaries expense. Salaries payable... Cash (received from customers) D) 60 Summary Entry D) Summary Entry 38. Cash paid for insurance during the reporting period A) Summary Entry Prepaid insurance.. Cash (paid for insurance). Insurance Expense B) Summary Entry Prepaid insurance Cash (paid for insurance). C) Summary Entry Insurance expense. Prepaid insurance. Cash (paid for insurance).. D) Summary Entry Prepaid insurance... Cash (paid for insurance).. 2 Insurance Expense 22 39. Prepare the cash flows from operating activities section of the statement of cash flows (direct method). A) 56 B) 58 C) 57 Insurance expense 22 U 10 22 19 20 20 56 36 19 20 2 90 10 40. E 21-23 Cash flows from operating activities (direct method) Portions of the financial statements for Myriad Products are provided below. MYRIAD PRODUCTS COMPANY Income Statement For the Year Ended December 31, 2021 (S in millions) MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2021 and 2020 (s in millions) Sales $660 250 Cost of goods sold Gross margin 410 Year 2021 2020 Change $110 Salaries expense $ 2 90 S102 S100 Cash Depreciation expense Amortization expense 220 232 (12) 5 Accounts receivable 440 450 (10) 20 Interest expense 140 134 6 3 228 SO 86 Loss on sale of land (6) Inventory Accounts payable Salaries payable Interest payable Income tax payable 182 5 25 20 Income before taxes Income tax expense 91 15 10 5 $ 91 Net Income Required: Prepare the cash flows from operating activities section of the statement of cash flows for Myriad Products Company using the direct method. Direct Method Template Cash Flows from Operating Activities: Cash received from customers Cash paid to suppliers Cash paid to employees Cash paid for interest Cash paid for income taxes Net cash flows from operating activities