Portions of the financial statements for Parnell Company are provided below PARN
ID: 2536653 • Letter: P
Question
Portions of the financial statements for Parnell Company are provided below PARNELL COMPANY Income Statement For the Year Ended December 31, 2018 ($ in 000s) Revenues and gains: $ 850 Sales Gain on sale of buildings 10 860 Expenses and loss: Cost of goods sold Salaries Insurance Depreciation Interest expense Loss on sale of machinery $325 125 45 128 690 170 85 $ 85 Income before tax Income tax expense Net income PARNELL COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2017 (s in 000s) Year Change Cash Accounts receivable Inventory Prepaid insurance Accounts payable Salaries payable Deferred income tax liability Bond discount 2018 $ 144 334 316 2017 $95 211 435 98 112 49 123 (119) (37) 108 220 112 70 185 13 210 Required 1. Prepare the cash flows from operating activities section of the statement of cash flows for Parnell Company using the direct method 2. Prepare the cash flows from operating activities section of the statement of cash flows for Parnell Company using the indirect methodExplanation / Answer
cash flow statement(Partial) cash flow from operating activities (Direct) collection from receivable [850 sales -123 increase in receivable] 727 payment to supplier [325 cost of sales-119 increase in inventory -108 increase in payable] (98) salary paid [125-24] (101) payment for insurance [45-37] (8) Interest expense [55-25] (30) income tax paid [85-13] (72) net cash provied by operating activity 418