Solution-Prepare the cash flows from operating activities

Prepare the cash flows from operating activities

Reference no: EM131604230

Problem - Portions of the financial statements for Hawkeye Company are provided below.

HAWKEYE COMPANY Income Statement For the Year Ended December 31, 2013
Sales		$820
Cost of goods sold		(310)
Gross margin		510
Salaries expense	$ 224
Depreciation expense	182
Interest expense	32
Gain on sale of cash equivalents	(4)	(434)
Income before taxes and extraordinary loss		76
Income tax expense		(38)
Income before extraordinary loss		38
Extraordinary loss (flood damage to inventory)	12
Less: Tax savings	(6)	(6)
Net Income		$32

HAWKEYE COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2013 and 2012
	Year
	2013	2012	Change
Cash	$248	$218	$30
Accounts receivable	387	405	(18)
Inventory	896	868	28
Accounts payable	228	270	(42)
Salaries payable	188	204	(16)
Interest payable	71	58	13
Income taxes payable	98	120	(22)

Required:

1. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the direct method. (Amounts to be deducted should be indicated with a minus sign.)

2. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Reference no: EM131604230

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Prepare the cash flows from operating activities

Reference no: EM131604230

Reference no: EM131604230

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