The income statement and a schedule reconciling cash flows from operating activities to net income are provided below ($ in thousands) for Peach Computers. PEACH COMPUTERS Income Statement For the Year Ended December 31, 2021 Sales $ 380.0 Cost of goods sold (190.0 ) Gross margin 190.0 Salaries expense $ 43.0 Insurance expense 20.0 Depreciation expense 9.0 Loss on sale of land 7.0 79.0 Income before tax 111.0 Income tax expense (55.5 ) Net income $ 55.5 Reconciliation of Net Income To Net Cash Flows from Operating Activities Net income $ 55.5 Adjustments for Noncash Effects Depreciation expense 9.0 Loss on sale of land 7.0 Changes in operating assets and liabilities: Decrease in accounts receivable 11.0 Increase in inventory (38.0 ) Decrease in accounts payable (23.0 ) Increase in salaries payable 15.0 Decrease in prepaid insurance 11.5 Increase in income tax payable 52.5 Net cash flows from operating activities $ 100.5 Required: 1. Calculate each of the following amounts for Peach Computers. 2. Prepare the cash flows from operating activities section of the statement of cash flows (direct method). Calculate each of the following amounts for Peach Computers. (Enter your answers in thousands rounded to 1 decimal place (i.e., 5,500 should be entered as 5.5). Cash outflows must be indicated with a minus

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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The income statement and a schedule reconciling cash flows from operating activities to net income are provided below ($ in thousands) for Peach Computers.

PEACH COMPUTERS Income Statement For the Year Ended December 31, 2021
Sales			$	380.0
Cost of goods sold				(190.0	)
Gross margin				190.0
Salaries expense	$	43.0
Insurance expense		20.0
Depreciation expense		9.0
Loss on sale of land		7.0		79.0
Income before tax				111.0
Income tax expense				(55.5	)
Net income			$	55.5

Reconciliation of Net Income To Net Cash Flows from Operating Activities
Net income	$	55.5
Adjustments for Noncash Effects
Depreciation expense		9.0
Loss on sale of land		7.0
Changes in operating assets and liabilities:
Decrease in accounts receivable		11.0
Increase in inventory		(38.0	)
Decrease in accounts payable		(23.0	)
Increase in salaries payable		15.0
Decrease in prepaid insurance		11.5
Increase in income tax payable		52.5
Net cash flows from operating activities	$	100.5

Required:
1. Calculate each of the following amounts for Peach Computers.
2. Prepare the cash flows from operating activities section of the statement of cash flows (direct method).

Calculate each of the following amounts for Peach Computers. (Enter your answers in thousands rounded to 1 decimal place (i.e., 5,500 should be entered as 5.5). Cash outflows must be indicated with a minus sign.)


a.	Cash received from customers during the reporting period.
b.	Cash paid to suppliers of goods during the reporting period.
c.	Cash paid to employees during the reporting period.
d.	Cash paid for insurance during the reporting period.
e.	Cash paid for income taxes during the reporting period.

Required 2

Prepare the cash flows from operating activities section of the statement of cash flows (direct method). (Enter your answers in thousands rounded to 1 decimal place (i.e., 5,500 should be entered as 5.5). Amounts to be deducted should be indicated with a minus sign.)


Cash Flows from Operating Activities:






Net cash flows from operating activities

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