Portions of the financial statements for Myriad Products are provided below. MYRIAD PRODUCTS COMPANYIncome StatementFor the Year Ended December 31, 2021($ in millions) Sales 780Cost of goods sold 273Gross margin 507Salaries expense120 Depreciation expense86 Amortization expense5 Interest expense26 Loss on sale of land4241Income before taxes 266Income tax expense 133Net Income 133 MYRIAD PRODUCTS COMPANYSelected Accounts from Comparative Balance SheetsDecember 31, 2021 and 2020($ in millions) Year 20212020ChangeCash$1201182Accounts receivable 249259(10)Inventory 449468(19)Accounts payable 18517015Salaries payable 92104(12)Interest payable 523814Income tax payable 422814 Required:Prepare the cash flows from the operating activities section of the statement of cash flows for Myriad Products Company using the indirect method. **Cash Flow Statement Template for Educational Purposes**This cash flow statement is a template used to organize and report cash flows from operating activities. It includes various sections which are outlined below:1. **Cash Flows from Operating Activities:** - This section captures the total cash generated from the core business operations excluding financing and investing activities.2. **Adjustments for Noncash Effects:** - In this section, adjustments are made for transactions that affect net income but do not involve actual cash, such as depreciation, amortization, and other similar noncash items.3. **Changes in Operating Assets and Liabilities:** - This part includes adjustments for changes in working capital components like accounts receivable, inventory, and accounts payable. These changes reflect how much cash is tied up in day-to-day operations.4. **Net Cash Flows from Operating Activities:** - The final line provides the net cash effect of operating activities after all adjustments, showing how much cash the business generates purely from its operating transactions.Each section provides input fields where specific amounts (in millions) can be filled out. The template ends with a calculated total for "Net cash flows from operating activities," which is currently set to $0, indicating no data has been input yet. This structure helps in understanding the cash position of a business derived from its primary operational transactions.

The cash flow statement is prepared to record the cash flow from various activities during the…

Answered: Portions of the financial statements…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Portions of the financial statements for Myriad Products are provided below.

MYRIAD PRODUCTS COMPANY Income Statement For the Year Ended December 31, 2021 ($ in millions)
Sales		780
Cost of goods sold		273
Gross margin		507
Salaries expense	120
Depreciation expense	86
Amortization expense	5
Interest expense	26
Loss on sale of land	4	241
Income before taxes		266
Income tax expense		133
Net Income		133

MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions)
	Year
		2021	2020	Change
Cash	$	120	118	2
Accounts receivable		249	259	(10)
Inventory		449	468	(19)
Accounts payable		185	170	15
Salaries payable		92	104	(12)
Interest payable		52	38	14
Income tax payable		42	28	14

Required:
Prepare the cash flows from the operating activities section of the statement of cash flows for Myriad Products Company using the indirect method.

**Cash Flow Statement Template for Educational Purposes**

This cash flow statement is a template used to organize and report cash flows from operating activities. It includes various sections which are outlined below:

1. **Cash Flows from Operating Activities:**
- This section captures the total cash generated from the core business operations excluding financing and investing activities.

2. **Adjustments for Noncash Effects:**
- In this section, adjustments are made for transactions that affect net income but do not involve actual cash, such as depreciation, amortization, and other similar noncash items.

3. **Changes in Operating Assets and Liabilities:**
- This part includes adjustments for changes in working capital components like accounts receivable, inventory, and accounts payable. These changes reflect how much cash is tied up in day-to-day operations.

4. **Net Cash Flows from Operating Activities:**
- The final line provides the net cash effect of operating activities after all adjustments, showing how much cash the business generates purely from its operating transactions.

Each section provides input fields where specific amounts (in millions) can be filled out. The template ends with a calculated total for "Net cash flows from operating activities," which is currently set to $0, indicating no data has been input yet.

This structure helps in understanding the cash position of a business derived from its primary operational transactions.

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