Acct312 Intermediate Accounting: E21-21 The income statement and a schedule reconciling

Acct312 Intermediate Accounting
Week 6

E21-21
The income statement and a schedule reconciling cash flows from operating activities to net income are provided below ($ in 000s) for Peach Computers.
PEACH COMPUTERS Reconciliation of Net Income
Income Statement To Net Cash Flows from Operating Activites
For the Year Ended December 31, 2013
Sales 305 Net income 22
Cost of goods sold (185) Adjustments for Noncash Effects
Gross margin 120 Depreciation expense 11
Salaries expense 41 Loss on sale of land 5
Insurance expense 19 Changes in operating assets and liabilities:
Depreciation expense 11 Decrease in accounts receivable 6
Loss on sale of land 5 76 Increase in inventory (13)
Income before tax 44 Decrease in accounts payable (8)
Income tax expense (22) Increase in salaries payable 5
Net income $22 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).
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