The income statement and a schedule reconciling cash flows from operating activi

Question

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

Calculate each of the following amounts for Mike Roe Computers: (Enter your answers in millions of dollars rounded to 2 decimal places. Input all amounts as positive values.)

Prepare the cash flows from operating activities section of the statement of cash flows (direct method). (Enter your answers in millions of dollars rounded to 2 decimal places.Amounts to be deducted should be indicated with a minus sign.)

MIKE ROE COMPUTERS
Income Statement
For the Year Ended December 31, 2013   Sales $ 150.80      Cost of goods sold (90.40)      Gross margin 60.40      Salaries expense $ 20.80      Insurance expense 12.80      Depreciation expense 5.40      Interest expense 6.40    (45.40)   Gains and losses:      Gain on sale of equipment 12.80         Loss on sale of land (3.80)   Income before tax 24.00         Income tax expense (12.00)   Net income $ 12.00   

Explanation / Answer

2) Cash flow from operating activities ($ million):

Cash collected from customers (in million $) Net sales during the year 150.8 Add: Decrease in accounts receivable 5.4 Cash Collected from customers 156.2

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