Question

Portions of the financial statements for Clear Transmissions Company are provided below.

CLEAR TRANSMISSIONS COMPANY Income Statement For the Year Ended December 31, 2018 ($ in 000s)
Sales					$	1,620
Cost of goods sold						648
Gross margin						972
Salaries expense	$	280
Depreciation expense		205
Patent amortization expense		20
Interest expense		60
Loss on sale of cash equivalents		11				576
Income before taxes						396
Income tax expense						198
Net Income					$	198

CLEAR TRANSMISSIONS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2017 ($ in 000s)
	Year
	2018			2017			Change
Cash	$	117		$	110		$	7
Accounts receivable		230			247			(17	)
Inventory		445			460			(15	)
Accounts payable		165			154			11
Salaries payable		85			96			(11	)
Interest payable		40			30			10
Income taxes payable		30			20			10

Required:
Prepare the cash flows from operating activities section of the statement of cash flows for Clear Transmissions Company using the direct method. (Enter your answers in thousands (i.e., 5,000 should be entered as 5). Amounts to be deducted should be indicated with a minus sign.)

	Cash Flows from Operating Activities: Cash received from customers $1,637 Cash decrease from sale of cash equivalents Cash paid to suppliers Cash paid to employees Cash paid for interest Cash paid for income taxes Net cash flows from operating activities $1,637

Answer 1

Answer
Cleat Transmission Company
Cash Flow from Operating Activities
(For the year ending 31st December, 2016)
Indirect Method
		($ in '000)
	Net Income	$          198
Add:	Non Cash Expenses
	Depreciation & Amortisation	$          225
Add:	Non Operating Losses
	Loss on sale of cash equivalents	$            11
Add:	Decrease in Current Assets
	Account Receivable	$            17
	Inventory	$            15
Less:	Increase in Current Assets
Add:	Increase in Current Liabilities
	Accounts payble	$            11
	Interest Payble	$            10
	Income Tax Payble	$            10
Less:	Decrease in Current Liabilities
	Salaries Payble	$            11
	Net cash Flow from Operating Activities	$          486