The income statement and a schedule reconciling cash flows from operating activi
ID: 2600138 • Letter: T
Question
The income statement and a schedule reconciling cash flows from operating activities to net income are provided below for Macrosoft Corporation.
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 for Macrosoft Corporation.
MACROSOFT CORPORATIONIncome Statement
For the Year Ended December 31, 2016
($ in millions) Revenues and gains: Sales $ 314.00 Gain on sale of cash equivalents 2.20 Gain on sale of investments 24.20 $ 340.40 Expenses and loss: Cost of goods sold $ 122.00 Salaries 40.20 Interest expense 12.20 Insurance 20.20 Depreciation 10.20 Patent amortization 4.20 Loss on sale of land 6.20 215.20 Income before tax 125.20 Income tax expense 62.60 Net income $ 62.60
to Net Cash Flows
from Operating Activities
($ in millions) Net income $ 62.60 Adjustments for noncash effects: Depreciation expense 10.20 Patent amortization expense 4.20 Loss on sale of land 6.20 Gain on sale of investment (24.20 ) Decrease in accounts receivable 6.20 Increase in inventory (12.20 ) Increase in accounts payable 18.20 Decrease in bond discount 1.20 Increase in salaries payable 6.20 Decrease in prepaid insurance 4.20 Increase in income tax payable 10.20 Net cash flows from operating activities $ 93.00 Required:
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.)
Cash Flows from Operating Activities: Cash increase from sale of cash equivalents Net cash flows from operating activities $0.00Explanation / Answer
Cash Flows from Operating Activities (Direct Method)
1. Cash collections from sale
Cash payment for purchases
Cash payment for Insurance
Cash payment for salaries
Cash payment for income taxes
Cash payment for interest
Cash Flows from Operating Activities: Cash increase from sale of cash equivalents $2.20 Cash collections from sale 320.20 Payments: Cash payment for purchases (116.00) Cash payment for Insurance (16.00) Cash payment for salaries (34.00) Cash payment for interest (11.00) Cash payment for income taxes (52.40) Net cash flows from operating activities 93.00Related Questions
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