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					$	500.0
Cost of goods sold						(250.0	)
Gross margin						250.0
Salaries expense	$	59.0
Insurance expense		36.0
Depreciation expense		17.0
Loss on sale of land		15.0				127.0
Income before tax						123.0
Income tax expense						(61.5	)
Net income					$	61.5

Reconciliation of Net Income To Net Cash Flows from Operating Activities
Net income	$	61.5
Adjustments for Noncash Effects
Depreciation expense		17.0
Loss on sale of land		15.0
Changes in operating assets and liabilities:
Decrease in accounts receivable		19.0
Increase in inventory		(78.0	)
Decrease in accounts payable		(47.0	)
Increase in salaries payable		31.0
Decrease in prepaid insurance		15.5
Increase in income tax payable		56.9
Net cash flows from operating activities	$	90.9

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).

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. d. Cash paid for insurance during the reporting period. e. Cash paid for income taxes during the reporting period.

	Cash Flows from Operating Activities: Net cash flows from operating activities

Answer 1

Computaiton of Received From Customers
Sales	$500.00
Add: Decrease In Accounts Receivable	$19.00
Received From Customers	$519.00
Computaiton of Payment To Suppliers
Cost Of Goods Sold	$250.00
Add: Increase In Inventory	$78.00
Purchase	$328.00
Add: Deccrease In Account Payable	$47.00
Payment To Suppliers	$375.00
Computaiton of Cash Paid To Employees
Salaries Expense	$59.00
Less: Increase In Salaries Payable	$31.00
Paid To Employees	$28.00
Computaiton of Cash Paid For Insurance
Insurance Expense	$36.00
Less: Decrease In Prepaid Insurance	$15.50
Paid For Insurance	$20.50
Computation of Cash Paid For Income Tax
Income Tax Expense	$61.50
Less: Increase In Income Tax Payable	$56.90
Paid For Income Tax	$4.60
CASH FLOW OPERATING ACTIVITES
Cash Received From Customers	$519.00
Cash Paid To Suppliers	-$375.00
Cash Paid To Employees	-$28.00
Cash Paid For Insurance	-$20.50
Cash Paid For Income Taxes	-$4.60
Net Cash Flow From Operating Activities	$90.90