Chapter 21, Problem 21.6P

Cash flows from operating activities (direct method) derived from an income statement and cash flows from

operating activities (indirect method)

• LO21–3, LO21–4

The income statement and a schedule reconciling cash flows from operating activities to net income are provided below for Mike Roe Computers.

Required:

1. 1. Calculate each of the following amounts for Mike Roe Computers:
   1. a. Cash received from customers during the reporting period
   2. b. Cash paid to suppliers of goods during the reporting period
   3. c. Cash paid to employees during the reporting period
   4. d. Cash paid for interest during the reporting period
   5. e. Cash paid for insurance during the reporting period
   6. f. Cash paid for income taxes during the reporting period
2. 2. Prepare the cash flows from operating activities section of the statement of cash flows (direct method).