Reference no: EM132513042
Portions of the financial statements for Clear Transmissions Company are provided below.
CLEAR TRANSMISSIONS COMPANY
Income Statement
For the Year Ended December 31, 2018 ($ in 000s)
Sales $2,520
Cost of goods sold 1,008
Gross margin 1,512
Salaries expense$460
Depreciation expense 280
Patent amortization expense 50
Interest expense 120
Loss on sale of cash equivalents 26
936
Income before taxes 576
Income tax expense 288
Net Income $288
CLEAR TRANSMISSIONS COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2018 and 2017 ($ in 000s)
Year 2018 2017
Change
Cash $153 $140 $13
Accounts receivable 271 292 (21)
Inventory 470 490 (20)
Accounts payable 228 214 14
Salaries payable 112 126 (14)
Interest payable 72 60 12
Income taxes payable 63 50 13
Required:
Question 1: Prepare the cash flows from operating activities section of the statement of cash flows for Clear Transmissions Company using the direct method.