Question
Answered

Cash flows from operating activities (direct method) [LO21-3]...


Cash flows from operating activities (direct method) [LO21-3]

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       $ 1,000  
  Cost of goods sold         (350 )
       
       Gross margin         650  
  Salaries expense $ 175        
  Depreciation expense   108        
  Patent amortization expense   5        
  Interest expense   48        
  Loss on sale of land   4     (340 )
 
  Income before taxes         310  
       Income tax expense         (155 )
       
  Net Income       $ 155  
       

   

MYRIAD PRODUCTS COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2016 and 2015
($ in millions)
  Year  
   
  2016 2015 Change
  Cash $ 153   $ 140   $ 13  
  Accounts receivable   271     292     (21 )
  Inventory   470     490     (20 )
  Accounts payable   228     214     14  
  Salaries payable   112     126     (14 )
  Interest payable   72     60     12  
  Income taxes payable   63     50     13  

 

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).)


Answer & Explanation
Verified Solved by verified expert

ec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nam lacinia pulvin

pulvinar tortor nec facilisis. Pellentesque dapibus efficitu

Unlock full access to Course Hero

Explore over 16 million step-by-step answers from our library

Subscribe to view answer