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

Answer 1