Question

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					$	320.0
Cost of goods sold						(160.0	)
Gross margin						160.0
Salaries expense	$	35.0
Insurance expense		12.0
Depreciation expense		5.0
Loss on sale of land		3.0				55.0
Income before tax						105.0
Income tax expense						(52.5	)
Net income					$	52.5

Reconciliation of Net Income To Net Cash Flows from Operating Activities
Net income	$	52.5
Adjustments for Noncash Effects
Depreciation expense		5.0
Loss on sale of land		3.0
Changes in operating assets and liabilities:
Decrease in accounts receivable		7.0
Increase in inventory		(18.0	)
Decrease in accounts payable		(11.0	)
Increase in salaries payable		7.0
Decrease in prepaid insurance		9.5
Increase in income tax payable		50.3
Net cash flows from operating activities	$	105.3

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.)

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. xxxxxxxxxxx d. Cash paid for insurance during the reporting period. n 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. xxxxxxxxx b. Cash paid to suppliers of goods during the reporting period. xxxxxxxxxd c. Cash paid to employees during the reporting period. xxxxxxxx d. Cash paid for insurance during the reporting period. xxxxxxxxxd e. Cash paid for income taxes during the reporting period. xxxxxxxxx

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: xxxxxxxxxxxx Net cash flows from operating activities $0.0

Answer 1

1.

a	Cash Collected from Customers	$               327.00	=320+7
b	Cash Paid to Suppliers	$              (189.00)	=-(160+11+18)
c	Cash Paid to Employees	$                (28.00)	=-(35-7)
d	Cash paid for Insurance	$                  (2.50)	=-(12-9.5)
e	Cash paid for Income Taxes	$                  (2.20)	=-(52.5-50.3)

2.

Cash Flow Statement
Direct Method
Cash flow from Operating Activities
Cash Collected from Customers	$               327.00
Cash Paid to Suppliers	$              (189.00)
Cash Paid to Employees	$                (28.00)
Cash paid for Insurance	$                  (2.50)
Cash paid for Income Taxes	$                  (2.20)
Net Cash from operating activities	$               105.30