he income statement and a schedule reconciling cash flows from or Mike Roe Compu

Question

he income statement and a schedule reconciling cash flows from or Mike Roe Computers. MIKE ROE COMPUTERS Income Statement For the Year Ended December 31, 2018 Sales Cost of goods sold $149.80 (89.90) 59.90 Gross margin Salaries expense Insurance expense Depreciation expense Interest expense Gains and losses: $19.80 11.80 4.90 5.90 (42.40) Gain on sale of equipment Loss on sale of land 11.80 (2.80) 26.50 (13. 25) $ 13.25 Income before tax Income tax expense Net income Reconciliation of Net Income to Net Cash Flows from Operating Activities Prev31 of 31 EE o search

Explanation / Answer

Req 1: Journal entries Cash Account Dr. 154.7       Accounts receivable 154.7 (for cash rececived from customers) Accounts payable Dr. 86.9      Cash Account 86.9 (for cash payment to suppliers) Note: Cash receivevd from Customer: Sales revenue reported:   149.8 Add: Decrease in Accounts recievable 4.9 Cash received from accounts receivable 154.7 Cash payment to Suppliers of goods: Cost of goods sold 89.9 Add: Inventory level increase 5.9 Inventory purchased 95.8 Less: Increase in Accounts payable at end 8.9 Payment to Suppliers of goods 86.9 Req 2: Cash flows from Operating Activities: Cash received from customers 154.7 Cash paid to suppliers -86.9 Cash paid for Salaries expense (19.80-2.90) -16.9 Cashh paid for Insurance expense (11.80-1.90) -9.9 Taxes paid (13.25-5.90) -7.35 Interest paid (5.90-2.95) -2.95 Net cash flows from operating Activities 30.7

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