Question

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					$	980
Cost of goods sold						343
Gross margin						637
Salaries expense	$	170
Depreciation expense		106
Patent amortization expense		5
Interest expense		46
Loss on sale of land		4				331
Income before taxes						306
Income tax expense						153
Net Income					$	153

MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions)
	Year
	2018			2017			Change
Cash	$	150		$	138		$	12
Accounts receivable		269			289			(20	)
Inventory		469			488			(19	)
Accounts payable		223			210			13
Salaries payable		111			124			(13	)
Interest payable		69			58			11
Income taxes payable		60			48			12

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

Answer 1

Answer-

MYRIAD PRODUCTS
STATEMENT OF CASH FLOWS PARTIAL (USING INDIRECT METHOD)
FOR THE YEAR ENDED DECEMBER 31,2018
Particulars		Amount
		$ in millions
Cash flow from operating activities
Net Income		153
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation expense		106
Patent amortization expense		5
Loss on sale of land		4
Change in operating assets & liabilities
Decrease in accounts receivable		20
Decrease in inventory		19
Increase in interest payable		11
Decrease in salaries payable		-13
Increase in accounts payable		13
Increase in income taxes payable		12
Net cash flow from operating activities		330