Reference no: EM132795186
Question - Presented below is the income statement of Gregg, Inc. for the year ended 12/31/20:
Sales $380,000
Cost of goods sold 225,000
Gross profit $155,000
Operating expenses 95,000
Income before income taxes 60,000
Income taxes 24,000
Net income $36,000
In addition, the following selected balance sheet information is also provided for 12/31/19 & 12/31/20
Cash $112,000 $100,000
Trade accounts receivable (net) $55,000 $45,000
Inventories $80,000 $99,400
Salaries payable $27,000 $35,000
Trade accounts payable $50,000 $41,000
Income tax payable $11,000 $14,000
The company also indicates that depreciation expense for the year was $13,700 (already incorporated into the $36,000 of net income presented) and that the deferred tax liability account increased $2,600.
Required -
(a) Prepare a schedule computing the net cash flow from operating activities that would be shown on Gregg's statement of cash flows using the indirect method.
(b) Calculate the cash received from customers, cash paid to suppliers, and cash paid for income taxes if Gregg were to prepare the statement of cash flows under the direct method.