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					$	720
Cost of goods sold						252
Gross margin						468
Salaries expense	$	105
Depreciation expense		80
Amortization expense		5
Interest expense		20
Loss on sale of land		4				214
Income before taxes						254
Income tax expense						127
Net Income					$	127

MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions)
	Year
	2021			2020			Change
Cash	$	120		$	112		$	8
Accounts receivable		232			250			(18	)
Inventory		446			462			(16	)
Accounts payable		170			158			12
Salaries payable		86			98			(12	)
Interest payable		43			32			11
Income tax payable		33			22			11

Required:
Prepare the cash flows from the 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

Cash flow from operating activities
Net income	127
Adjustment to reconcile net income to net cash provided by operating activities
Depreciation expense	80
Amortization expense	5
Loss on sale of land	4
Decrease account receivable	18
Decrease inventories	16
Increase account payable	12
Decrease salaries payable	-12
Increase interest payable	11
Increase income tax payable	11
Net cash provided by operating activities	272