Question

Exercise 21-23 Cash flows from operating activities (direct method) [LO21-3]

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					$	880
Cost of goods sold						308
Gross margin						572
Salaries expense	$	145
Depreciation expense		96
Patent amortization expense		5
Interest expense		36
Loss on sale of land		4				286
Income before taxes						286
Income tax expense						143
Net Income					$	143

MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions)
	Year
	2018			2017			Change
Cash	$	135		$	128		$	7
Accounts receivable		259			274			(15	)
Inventory		464			478			(14	)
Accounts payable		198			190			8
Salaries payable		106			114			(8	)
Interest payable		54			48			6
Income taxes payable		45			38			7

Required:
Prepare the cash flows from operating activities section of the statement of cash flows for Myriad Products Company using the direct method.

	($ in Millions)
Cash Flow From Operating Activities:
Net Cash Flow from Operating Activites:

Answer 1