iPad % 10:08 PM Income Statement For the Year Ended December 31, 2016 Sales Cost

Question

iPad % 10:08 PM Income Statement For the Year Ended December 31, 2016 Sales Cost of goods sold 350.0 (210.0) 140.0 Gross margin Salaries expense Insurance expense Depreciation expense Loss on sale of land $39.0 16.0 50 7.0 Income before tax Income tax expense (36.5) Net income 36.5 Reconciliation of Net Income To Net Cash Flows from Operating Activiies Adjustments for Noncash Effects Loss on sale of land 38.5 7.0 Changes in operating assets and liabilities: 9.0 (28.0) (17.0) 10.5 Inorease in inventory Inorease in salaries payable Decrease in prepaid insurance ncrease in income tax payable Net cash flows from operating activiies $67.9 Required 1. Calculate each of the folowing amounts for Peach Computers: (Enter your answers in thousands rounded to 1 decimal place (ie5,500 should be entered as 5.5). Amounts for cash outflows should be indicated with a minus sign) Cash received from customers during the reporting period 359.0 b. Cash paid to suppliers of goods during the reporting period c Cash paid to employees during the reporting periocd d. Cash paid for insurance during the reporting period e Cash paid for income taxes during the reporting period 28.0 (2.6) 2. Prepare the cash fiows from operating activisies section of the statement of cash flows (direct method). Enter your answers in thousands rounded to 1 decimal place (i.e, 5,500 should be entered as 5.5). Amounts to be deducted should be indicated with a minus sign. Cash Flows from Operating Activities: 359.0 Cash received from customers Cash paid to suppliers Cash paid to employees Cash paid Cash paid for income taxes (28.0 Net cash flows from operating activities

Explanation / Answer

1) a. Cash received from customer during the reporting period $    359.0 b. Cash paid to supplier of goods during the reporting period $    255.0 c. Cash paid to employees during the reporting period $       28.0 d. Cash paid for insurance during the reporting period $         5.5 e. Cash paid for Income Tax during the reporting period $         2.6 2) Cash flows from operating Activities: Cash received from customer $    359.0 Cash paid to supplier $   -255.0 Cash paid to employees $     -28.0 Cash paid for insurance $       -5.5 Cash paid for Income Taxes $       -2.6 Net Cash flows from operating activities $       67.9 Working: a. Cash received from customer during the reporting period Sales $    350.0 Add:Decrease in accounts Receivable $         9.0 Cash received from customer   $    359.0 b. Cash paid to supplier of goods during the reporting period Step-1:Find Purchase made during period Cost of goods sold $    210.0 Add:Increase in Invetory $       28.0 Purchase $    238.0 Step-2:Find amount paid to supplier Purchase $    238.0 Add:decreasee in accounts payable $       17.0 Cash paid to supplier of goods $    255.0 c. Cash paid to employees during the reporting period Salaries expenses $       39.0 Less:Increase in Salaries Payable $       11.0 Cash paid to employees   $       28.0 d. Cash paid for insurance during the reporting period Insurance expenses $       16.0 Less:Decrease in Prepaid Insurance $       10.5 Cash paid for insurance   $         5.5 e. Cash paid for Income Tax during the reporting period Income Tax expenses $       36.5 Less:Increase in Income Tax Payable $       33.9 Cash paid for Income Tax $         2.6

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