40CashFlowStatement - 12 Award 10.00 points Problems Adjust...

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Unformatted text preview: 12. Award: 10.00 points Problems? Adjust credit for all students. Portions of the financial statements for Peach Computer are provided below. PEACH COMPUTER Income Statement For the year ended December 31, 2018 Net sales Expenses: Cost of goods sold $1,150,000 Operating expenses 660,000 Depreciation expense 60,000 Income tax expense 50,000 Total expenses Net income $2,050,000 1,920,000 $ 130,000 PEACH COMPUTER Selected Balance Sheet Data December 31 Cash Accounts receivable Inventory Prepaid rent Accounts payable Income tax payable 2018 $112,000 46,000 85,000 4,000 55,000 6,000 2017 $90,000 54,000 60,000 7,000 42,000 15,000 Increase (I) or Decrease (D) $22,000 (I) 8,000 (D) 25,000 (I) 3,000 (D) 13,000 (I) 9,000 (D) Required: Prepare the operating activities section of the statement of cash flows for Peach Computer using the direct method. (List cash outflows as negative amounts.) PEACH COMPUTER Statement of Cash Flows (partial) For the Year Ended December 31, 2018 Cash flows from operating activities Cash received from customers $ 2,058,000 Cash paid to suppliers (1,162,000) Cash paid for operating expenses (657,000) Cash paid for income taxes (59,000) $ Net cash flows from operating activities Explanation: + = Net sales Decrease in accounts receivable Cash received from customers $2,050,000 8,000 $2,058,000 + = − = Cost of goods sold Increase in inventory Purchases Increase in accounts payable Cash paid to suppliers $1,150,000 25,000 1,175,000 (13,000) $1,162,000 − = Operating expenses Decrease in prepaid rent Cash paid for operating expenses $ 660,000 (3,000) $ 657,000 + = Income tax expense Decrease in income tax payable Cash paid for income taxes $ 50,000 9,000 $ 59,000 Hints Hint #1 References eBook & Resources 180,000 ...
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