Question

Portions of the financial statements for Myriad Products are provided below.

MYRIAD PRODUCTS COMPANY Income Statement For the Year Ended December 31, 2021 ($ in millions)
Sales					$	820
Cost of goods sold						287
Gross margin						533
Salaries expense	$	130
Depreciation expense		90
Amortization expense		5
Interest expense		30
Loss on sale of land		4				259
Income before taxes						274
Income tax expense						137
Net Income					$	137

MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions)
	Year
	2021			2020			Change
Cash	$	126		$	122		$	4
Accounts receivable		253			265			(12	)
Inventory		461			472			(11	)
Accounts payable		183			178			5
Salaries payable		103			108			(5	)
Interest payable		45			42			3
Income tax payable		48			32			16

Required:
Prepare the cash flows from operating activities section of the statement of cash flows for Myriad Products Company using the direct method. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) *******Please include answer in a chart:
  

Answer 1

Ans:

MYRIAD PRODUCTS COMPANY
Partial Statement of Cash Flows
For The Year Ended December 31, 2021
Cash flows from operating activities (In Millions)
Cash received from customers ($820+$12)	$   832
Cash paid to suppliers ($287-$11-$5)	($271)
Cash paid to employees ($130+$5)	($135)
Cash paid for interest ($30-3)	$   (27)
Cash paid for income taxes ($137-$16)	($121)
Net cash flows from operating activities	$   278

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