Question

Portions of the financial statements for Peach Computer are provided below. PEACH COMPUTER Income Statement For the year ended December 31, 2021 Net sales $1,950,000 Expenses: Cost of goods sold $1,110,000 Operating expenses 620,000 Depreciation expense 56,000 Income tax expense 46,000 Total expenses 1,832,000 Net income $ 118,000 PEACH COMPUTER Selected Balance Sheet Data December 31 Cash Accounts receivable Inventory Prepaid rent Accounts payable Income tax payable 2021 $108,000 45,600 81,000 3,600 51,000 5,600 2020 $88,000 52,000 58,000 6,200 40,000 13,000 Increase (I) or Decrease (D) $20,000 (I) 6,400 (D) 23,000 (1) 2,600 (D) 11,000 (1) 7,400 (D) Required: Prepare the operating activities section of the statement of cash flows for Peach Computer using the Indirect method. (List cash outflows and any decrease in cash as negative amounts.)

Answer 1

Cash flows from operating Activities in 2 118,000 56,000 46000 220,000 Net Income Add Depreciation Expenses Add Income tax expenses Operating profit before working capital changes Add: - Decrease in Account Receivables lexfl- Increase in inventory Addl Arepaid rent Add: - Increase in Account 6400 23,000 2600 12ooo Net cash from operating Activities 217,000