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, 2018
Sales					$	305
Cost of goods sold						(185	)
Gross margin						120
Salaries expense	$	41
Insurance expense		19
Depreciation expense		11
Loss on sale of land		5				76
Income before tax						44
Income tax expense						(22	)
Net income					$	22

Reconciliation of Net Income To Net Cash Flows from Operating Activities
Net income	$	22
Adjustments for Noncash Effects
Depreciation expense		11
Loss on sale of land		5
Changes in operating assets and liabilities:
Decrease in accounts receivable		6
Increase in inventory		(13	)
Decrease in accounts payable		(8	)
Increase in salaries payable		5
Decrease in prepaid insurance		9
Increase in income tax payable		20
Net cash flows from operating activities	$	57

Required:
1. Calculate each of the following amounts for Peach Computers

	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.

2. Prepare the cash flows from operating activities section of the statement of cash flows (direct method).

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

Answer 1