In: Accounting
CHAPTER 21 (8.)
Portions of the financial statements for Myriad Products are
provided below.
MYRIAD PRODUCTS COMPANY Income Statement For the Year Ended December 31, 2018 ($ in millions) |
|||||||
Sales | $ | 1,000 | |||||
Cost of goods sold | 350 | ||||||
Gross margin | 650 | ||||||
Salaries expense | $ | 175 | |||||
Depreciation expense | 108 | ||||||
Patent amortization expense | 5 | ||||||
Interest expense | 48 | ||||||
Loss on sale of land | 4 | 340 | |||||
Income before taxes | 310 | ||||||
Income tax expense | 155 | ||||||
Net Income | $ | 155 | |||||
MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions) |
|||||||||
Year | |||||||||
2018 | 2017 | Change | |||||||
Cash | $ | 153 | $ | 140 | $ | 13 | |||
Accounts receivable | 271 | 292 | (21 | ) | |||||
Inventory | 470 | 490 | (20 | ) | |||||
Accounts payable | 228 | 214 | 14 | ||||||
Salaries payable | 112 | 126 | (14 | ) | |||||
Interest payable | 72 | 60 | 12 | ||||||
Income taxes payable | 63 | 50 | 13 | ||||||
Required:
Prepare the cash flows from operating activities section of the
statement of cash flows for Myriad Products Company using the
direct method.