The income statement and a schedule reconciling cash flows from operating activi
ID: 2522063 • Letter: T
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.
Required:
1. Provide the summary journal entry which shows the cash flow for each of the following for Mike Roe Computers during the reporting period: received from customers, paid to suppliers, paid to employees, paid for interest, paid for insurance, paid for income taxes.
-Record the summary journal entry showing cash received from customers during the reporting period
-Record the summary journal entry showing cash paid to suppliers of goods during the reporting period
-Record the summary journal entry showing cash paid to employees during the reporting period
-Record the summary journal entry showing cash paid for interest during the reporting period
-Record the summary journal entry showing cash paid for insurance during the reporting period
-Record the summary journal entry showing cash paid for income taxes during the reporting period
2. Prepare the cash flows from operating activities section of the statement of cash flows (direct method).
Income Statement
For the Year Ended December 31, 2018 Sales $ 149.80 Cost of goods sold (89.90 ) Gross margin 59.90 Salaries expense $ 19.80 Insurance expense 11.80 Depreciation expense 4.90 Interest expense 5.90 (42.40 ) Gains and losses: Gain on sale of equipment 11.80 Loss on sale of land (2.80 ) Income before tax 26.50 Income tax expense (13.25 ) Net income $ 13.25
Explanation / Answer
(cash paid for income tax)
Part 2
Event general journal debit credit A. cash 154.70 Accounts receivable 4.90 Sales revenue 149.80 (cash received from customers) B. cost of goods sold 89.90 Inventory 5.90 Accounts payable 8.90 Cash 86.90 (cash paid to suppliers) C. Salaries expense 19.80 Salaries payable 2.90 Cash 16.90 (cash paid to employees) D. interest expense 5.90 Discount on bonds payable 2.95 Cash 2.95 (cash paid for interest) E. insurance expense 11.80 Prepaid insurance 1.90 Cash 9.90 (cash paid for insurance) F. income tax expense 13.25 Income tax payable 5.90 Cash 7.35Related Questions
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