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[The following information applies to the questions displayed below.]    Green Brands, Inc. (GBI), presents its...

[The following information applies to the questions displayed below.]

  

Green Brands, Inc. (GBI), presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from GBI’s 2017 and 2016 year-end balance sheets.

  

  Account Title 2017 2016
  Accounts receivable $ 20,500 $ 27,000
  Merchandise inventory 57,300 50,600
  Prepaid insurance 17,900 25,600
  Accounts payable 23,900 19,100
  Salaries payable 5,000 3,950
  Unearned service revenue 650 2,750

  

The 2017 income statement is shown below:

  

Income Statement
  Sales $ 619,000
  Cost of goods sold (376,000 )
  
  Gross margin 243,000
  Service revenue 4,400
  Insurance expense (39,000 )
  Salaries expense (140,000 )
  Depreciation expense (6,000 )
  
  Operating income 62,400
  Gain on sale of equipment 3,300
  
  Net income $ 65,700
  
b.

Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

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Expert Solution

ekkarill92 answered 1 year ago
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