Question

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					$	840
Cost of goods sold						294
Gross margin						546
Salaries expense	$	135
Depreciation expense		92
Patent amortization expense		5
Interest expense		32
Loss on sale of land		4				268
Income before taxes						278
Income tax expense						139
Net Income					$	139

MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions)
	Year
	2018			2017			Change
Cash	$	129		$	124		$	5
Accounts receivable		255			268			(13	)
Inventory		462			474			(12	)
Accounts payable		188			182			6
Salaries payable		104			110			(6	)
Interest payable		48			44			4
Income taxes payable		39			34			5

Required:
Prepare the cash flows from (also adjustments for noncash effects section) operating activities section of the statement of cash flows for Myriad Products Company using the indirect method. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10.). Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Answer-:

The indirect method is one of two methods for preparing the cash flow statement. Under the indirect method, the cash flow statement begins with net income on an accrual basis and subsequently adds and subtracts non-cash items to reconcile to actual cash flows from operations.

Cash flow from operating activities using indirect Method are as follows-:

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