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					$	600
Cost of goods sold						210
Gross margin						390
Salaries expense	$	80
Depreciation expense		70
Patent amortization expense		5
Interest expense		10
Loss on sale of land		3				168
Income before taxes						222
Income tax expense						111
Net Income					$	111

MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions)
	Year
	2018			2017			Change
Cash	$	105		$	102		$	3
Accounts receivable		222			235			(13	)
Inventory		441			452			(11	)
Accounts payable		145			138			7
Salaries payable		81			88			(7	)
Interest payable		28			22			6
Income taxes payable		18			12			6

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

Myriads Product Company
Satement Of Cash Flow from Operating Activities
Particulars	($ in millions)
Cash Flow from operating Activities
Net Income	$ 111
Adjustment for Non Cash effects:
Depreciation Expense	$    70
Patent Amortization Expense	$       5
Loss on sale of Land	$       3
Changes in Operating assets and liabilities:
Decrease in Accounts Receivables	$    13
Decrease in Inventory	$    11
Increase in Accounts Payable	$       7
Decrease in Salaries Payable	$     -7
Increase in Interest payable	$       6
Increase in Income Tax payable	$       6
Net Cash Flows from Operating Activities	$ 225