Question

Portions of the financial statements for Myriad Products are provided below. MYRIAD PRODUCTS COMPANY Income Statement For the Year Ended December 31, 2818 (s in millions) Sales $760 Cost of goods sold Gross margin Salaries expense Depreciation expense Patent amortization expense Interest expense Loss on sale of land Income before taxes Income tax expense 228 532 $115 84 5 24 4 232 30e 158 150 Net Income MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2817 (s in millions) Year 2818 Change $ 1e (17) (18) 2817 Cash $126 $116 256 Accounts receivable Inventory Accounts payable Salaries payable Interest payable Income taxes payable 239 448 466 18e 166 14 88 (14) 13 102 36 49 26 36 10 Required: Prepare the cash flows from operating activities section of the statement of cash flows for Myriad Products Company using the direct method. (Amounts to be deducted should be Indicated with a minus sign. Enter your answers in millons (l.e., 10,000,000 should be entered as 10).) (S in millions) Cash Flows from Operating Activities: Net cash flows from operating activities

Answer 1

(S in millions) Cash flows from operating activities : Cash received from customers Cash paid to suppliers Cash paid to employees Cash paid for Interest paid Cash paid for Income taxes Net cash flow from operating activities 777 (196) (129) (11) (140) 301 S 1 Cash received from customers Opening balance of Accounts Receivables Add: Sales Less: Closing balance of accounts receivables 256 760 S (239) 777 2 Cash paid to suppliers Cost of Goods sold Add: Opening Balance of Accounts payable Closing Balance of Inventory 228 166 448 842 180 466 196 Less: Closing balance of accounts payable opening balance of inventory $ $ S

3 Cash paid to employees Opening balance of salaries payable Salaries Expenses 102 115 Less: closing balance of salaries payable $ 217 88 129 $ 4 Cash paid for Interest paid Opening balance of Interest payable Interest expenses 24 Less: closing balance of Interest Expenses $ 11 5 Cash paid to Income Tax Opening balance of Income tax Income tax Expense Less: Closing balance of income tax S $ S S 26 150 36 140