Portions of the financial statements for Myriad Products are provided below MYRI
ID: 2584422 • Letter: P
Question
Portions of the financial statements for Myriad Products are provided below MYRIAD PRODUCTS COMPANY Income Statement For the Year Ended December 31, 2016 ($ in millions) Sales Cost of goods sold $ 720 (252) Gross margin Salaries expense Depreciation expense Patent amortization expense Interest expense Loss on sale of land 468 S105 80 20 4 (214) 254 (127) Income before taxes Income tax expense Net Income $ 127 MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2016 and 2015 (S in millions) Year 2016 2015 Change Cash Accounts receivable232 250 (18) $120 $112 8 Inventory Accounts payable Salaries payable Interest payable Income taxes payable 446 462 (16) 170 158 12 86 98 (12) 43 32 11 22 33 11 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 millions (i.e., 10,000,000 should be entered as 10).1)Explanation / Answer
cash flow from operating Activities
cash receipts from customers
738
net sales
720
+ beginning accounts receivables
250
- ending accounts receivable
-232
Less payments
cash payment to supplier
224
purchases
252
+ ending inventory
446
- beginning inventory
-462
+ beginning accounts payable
158
- ending accounts payable
-170
cash payment to employee
117
beginning salaries payable
98
-ending salaries payable
-86
+salries payable
105
interest payment
9
beginning interest payable
20
- ending interest payable
-43
+interest expense
32
Income tax payment
116
beginning income tax payable
22
- ending income tax payable
-33
income tax expense
127
cash flow from operating activities
272
cash flow from operating Activities
cash receipts from customers
738
net sales
720
+ beginning accounts receivables
250
- ending accounts receivable
-232
Less payments
cash payment to supplier
224
purchases
252
+ ending inventory
446
- beginning inventory
-462
+ beginning accounts payable
158
- ending accounts payable
-170
cash payment to employee
117
beginning salaries payable
98
-ending salaries payable
-86
+salries payable
105
interest payment
9
beginning interest payable
20
- ending interest payable
-43
+interest expense
32
Income tax payment
116
beginning income tax payable
22
- ending income tax payable
-33
income tax expense
127
cash flow from operating activities
272