Prepare the cash flows from operating activities section of

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Reference no: EM13577968

The income statement and a schedule reconciling cash flows from operating activities to net income are provided below ($ in millions) for Mike Roe Computers.

MIKE ROE COMPUTERS Income Statement For the Year Ended December 31, 2013
Sales			$	149.20
Cost of goods sold				(89.60)

Gross margin				59.60
Salaries expense	$	19.20
Insurance expense		11.20
Depreciation expense		4.60
Interest expense		5.60		(40.60)

Gains and losses:
Gain on sale of equipment				11.20
Loss on sale of land				(2.20)

Income before tax				28.00
Income tax expense				(14.00)

Net income			$	14.00

Reconciliation of Net Income to Net Cash Flows from Operating Activities
Net income	$	14.00
Adjustments for noncash effects:
Decrease in accounts receivable		4.60
Gain on sale of equipment		(11.20)
Increase in inventory		(5.60)
Increase in accounts payable		8.60
Increase in salaries payable		2.60
Depreciation expense		4.60
Decrease in bond discount		2.80
Decrease in prepaid insurance		1.60
Loss on sale of land		2.20
Increase in income tax payable		5.60

Net cash flows from operating activities	$	29.80

Required:
1. Calculate each of the following amounts for Mike Roe Computers: (Enter your answers in millions of dollars rounded to 2 decimal places. Input all amounts as positive values.)

a. Cash received from customers during the reporting period.
b. Cash paid to suppliers of goods during the reporting period.
c. Cash paid to employees during the reporting period.
d. Cash paid for interest during the reporting period.
e. Cash paid for insurance during the reporting period.
f. Cash paid for income taxes during the reporting period.

2. Prepare the cash flows from operating activities section of the statement of cash flows (direct method). (Enter your answers in millions of dollars rounded to 2 decimal places.Amounts to be deducted should be indicated with a minus sign.)

Reference no: EM13577968

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