The income statement and a schedule reconilling cash fows from operating activit
ID: 2489933 • Letter: T
Question
The income statement and a schedule reconilling cash fows from operating activities to net income ane provided below for Macrosoft Corporation. MACROSOFT CORPORAT Income Statement For the Year Ended December 31, 2016 (S in millions) Revenues and gains: Sales Gain on sale of cash equivalents Gain on sale of investments $314.00 2.20 24.20 S 340.40 Expenses and loss Cost of goods sold Salaries Interest expense Insurance Depreciaton Patent amortization Loss on sale of land $122.00 40.20 12.20 20.20 10.20 4.20 6.20 215.20 Income before tax 125.20 62.60 Income tax expense Net Income $ 62.60 of Net Income to Net Cash Flows from Operating Activities ($ in mitions) Net income S 62.60 Adjustments for noncash effects 10.20 4.20 6.20 Patent amortization expense Loss on sale of land Gain on sale of investment Decrease in accounts recelvable Increase in inventory Increase in accounts payable Decrease in bond discount Increase in salaries payable Decrease in prepaid insurance Increase in income tax payable (24.20) (12.20) 6.20 18.20 1.20 6.20 4.20 10.20 Net cash flows from operating activities $ 93.00 Required: Prepare the ash fows from opening-ites section of (Enter your answers in milions rounded to 2 decimal activities section of the statement of cash flows (direct method) rounded to 2 decimal places (.e. 5.500,000 should be entered as tatement of cash nows 5.50) Amounts to be deducted should be indicated with a minus sign)Explanation / Answer
Cash flow from operating activities
Cash received from customers
(sales 314 + decrease in account receivable6.20)
320.2
Cash increase from sale of cash equivalent
2.20
Cash paid to suppliers
(COGS 122 + increase in inventory 12.20 – increase in accounts payable 18.20)
-116.00
Cash paid to employees
(salaries 40.20 – increase in salaries payable 6.20)
-34.00
Cash paid for interest
( interest expense 12.20 – decrease in bonds discount 1.20)
-11.00
Cash paid for insurance
(insurance expense 20.20 – decrease in prepaid insurance 4.20)
-16.00
Cash paid for income taxes
( income tax 62.60 – increase in income taxes payable 10.20)
-52.40
Cash flow from operating activities
93.00
Cash flow from operating activities
Cash received from customers
(sales 314 + decrease in account receivable6.20)
320.2
Cash increase from sale of cash equivalent
2.20
Cash paid to suppliers
(COGS 122 + increase in inventory 12.20 – increase in accounts payable 18.20)
-116.00
Cash paid to employees
(salaries 40.20 – increase in salaries payable 6.20)
-34.00
Cash paid for interest
( interest expense 12.20 – decrease in bonds discount 1.20)
-11.00
Cash paid for insurance
(insurance expense 20.20 – decrease in prepaid insurance 4.20)
-16.00
Cash paid for income taxes
( income tax 62.60 – increase in income taxes payable 10.20)
-52.40
Cash flow from operating activities
93.00
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