Portions of the financial statements for Myriad Products are
provided below.
MYRIAD PRODUCTS COMPANY Income Statement For the Year Ended December 31, 2018 ($ in millions) |
|||||||
Sales | $ | 680 | |||||
Cost of goods sold | 238 | ||||||
Gross margin | 442 | ||||||
Salaries expense | $ | 95 | |||||
Depreciation expense | 76 | ||||||
Patent amortization expense | 5 | ||||||
Interest expense | 16 | ||||||
Loss on sale of land | 4 | 196 | |||||
Income before taxes | 246 | ||||||
Income tax expense | 123 | ||||||
Net Income | $ | 123 | |||||
MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions) |
|||||||||
Year | |||||||||
2018 | 2017 | Change | |||||||
Cash | $ | 114 | $ | 108 | $ | 6 | |||
Accounts receivable | 228 | 244 | (16 | ) | |||||
Inventory | 444 | 458 | (14 | ) | |||||
Accounts payable | 160 | 150 | 10 | ||||||
Salaries payable | 84 | 94 | (10 | ) | |||||
Interest payable | 37 | 28 | 9 | ||||||
Income taxes payable | 27 | 18 | 9 | ||||||
Required:
Prepare the cash flows from operating activities section of the
statement of cash flows for Myriad Products Company using the
indirect method
Answer
Cash Flow from Operating Activities | ||
Net Income | $ 123 | |
Income tax expense | $ 123 | |
Loss on sale of land | $ 4 | |
Depreciation | $ 76 | |
Amortization | $ 5 | |
Interest expense | $ 16 | |
Decrease in Account receivable | $ 16 | |
Decrease in Inventory | $ 14 | |
Increase in Accounts payable | $ 10 | |
Decrease in salaries payable | $ (10) | |
$ 377 |
Note:
Income tax Payable | |||
Particulars | Amount | Particulars | Amount |
Balance b/d | $ 18 | ||
Paid | $ 114 | tax expense | $ 123 |
Balance c/d | $ 27 | ||
$ 141 | $ 141 |
In case of any doubt, please comment.
Portions of the financial statements for Myriad Products are provided below. MYRIAD PRODUCTS COMPANY Income Statement...
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Portions of the financial statements for Myriad Products are provided below. Required: Prepare the cash flows from the operating activities section of the statement of cash flows for Myriad Products Company using the indirect method. (Enter your answers in millions (Le., 10,000,000 should be entered es 10). Amounts to be deducted should be indicated with a minus sign.)
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