The following Income Statement and Operating Cash Flow information pertain to Receivership Inc.'s operations for the year ended December 31, 2018.Income statement for the year ended December 31, 2018Revenues 1,328 Cost of goods sold 587 Rent expenses 152 Wages expenses 136 Insurance expenses 53 Other SG&A (includes depreciation expenses) 198 Interest expenses 30 Gain on sale of asset (5) 1,151 Income before tax 177 Tax 62 Net income 115 Cash flow provided by operating activities(indirect method), for the year ended December 31, 2018Net income 115 Depreciation 32 Gain on sale of
asset (5) 142 Increases/decreases in Accounts receivable 26 Inventories (35) Prepaid rent 13 Accounts payable 28 Wages payable (20) Tax payable 5 Interest payable (2) Advances from customers (3) Other accrued SG&A 5 17 Net cash provided by operating activities 159 Required:
Prepare the net cash flow from operating activities section of the cash flow statement using the direct method.
What will be an ideal response?
1.
| Collections from customers | 1328 + 26 - 3 | = | 1,351 | ||
| Payments to suppliers | -587 - 35 + 28 | = | (594 | ) | |
| Rent payments | -152 + 13 | = | (139 | ) | |
| Wages payments | -136 - 20 | = | (156 | ) | |
| Insurance payments | (53 | ) | |||
| Interest payments | -30 - 2 | = | (32 | ) | |
| Other SG&A payments | -198 + 32 + 5 | = | (161 | ) | |
| Tax payments | -62 + 5 | = | (57 | ) | |
| Net cash provided by operating activities | 159 | ||||
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