The income statement and a schedule reconciling cash flows from operating activi
ID: 2485567 • Letter: T
Question
The income statement and a schedule reconciling cash flows from operating activities to net income are provided below ($ in millions) for Mike Roe Computers.
Provide the summary journal entry which shows the cash flow for each of the following for Mike Roe Computers during the reporting period: received from customers, paid to suppliers, paid to employees, paid for interest, paid for insurance, paid for income taxes. ((If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50).)
Prepare the cash flows from operating activities section of the statement of cash flows (direct method).(Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). Amounts to be deducted should be indicated with a minus sign.)
The income statement and a schedule reconciling cash flows from operating activities to net income are provided below ($ in millions) for Mike Roe Computers.
Explanation / Answer
1)
Working Notes:
Journal:
2)
Received from customers Sales $ 150.20 Add: Decrease in accounts receivable $ 5.10 Received from customers $ 155.30 payment to suppliers Cost of goods sold $ 90.10 Add: Increase in inventory $ 6.10 Purchase $ 96.20 less: increase in accounta payable $ 9.10 payment to suppliers $ 87.10 Paid to employees salaries expense $ 20.20 Less: increase in salaries payable $ 3.10 Paid to employees $ 17.10 Paid for interest Interest expense $ 6.10 Less: decrease in bond discount $ 3.05 (amortization of bond discount increases the interest EXPENSE) Payment for interest $ 3.05 paid for insurance insurance expense $ 12.20 Less: decrease in prepaid insurance $ 2.10 paid for insurance $ 10.10 paid for income tax income tax expense $ 12.75 Less: increase in income tax payable $ 6.10 paid for income tax $ 6.65Related Questions
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