The income statement and a schedule reconciling cash flows fromoperating activities to net income are provided below for MacrosoftCorporation.

MACROSOFTCORPORATION
Income Statement
For the Year Ended December 31, 2016
($ in millions)

Revenues andgains:

Sales $ 292.00

Gainon sale of cash equivalents 1.10

Gain onsale of investments 23.10 $ 316.20

Expenses and loss:

Cost ofgoods sold $ 111.00

Salaries 39.10

Interestexpense 11.10

Insurance 19.10

Depreciation 9.10

Patentamortization 3.10

Losson sale of land 5.10 197.60

Income before tax 118.60

Income taxexpense 59.30

Netincome $ 59.30

Reconciliation of Net Income
to Net Cash Flows
from Operating Activities
($ in millions)

Netincome $ 59.30

Adjustments fornoncash effects:

Depreciationexpense 9.10

Patent amortizationexpense 3.10

Loss on sale ofland 5.10

Gain on sale ofinvestment (23.10 )

Decrease in accountsreceivable 5.10

Increase ininventory (11.10 )

Increase in accountspayable 17.10

Decrease in bonddiscount .10

Increase in salariespayable 5.10

Decrease in prepaidinsurance 3.10

Increase in income taxpayable 9.10

Net cash flowsfrom operating activities $ 82.00

Cash Flows from Operating Activities:

Cash received from customers

Cash increase from sale of cash equivalents

Cash paid to suppliers

Cash paid to employees

Cash paid for interest

Cash paid for insurance

Cash paid for income taxes

Net cash flows from operating activities

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Question

The income statement and a schedule reconciling cash flows fromoperating activities to net income are provided below for MacrosoftCorporation.

Revenues andgains:
Sales	$	292.00
Gainon sale of cash equivalents		1.10
Gain onsale of investments		23.10	$	316.20

Expenses and loss:
Cost ofgoods sold	$	111.00
Salaries		39.10
Interestexpense		11.10
Insurance		19.10
Depreciation		9.10
Patentamortization		3.10
Losson sale of land		5.10		197.60

Income before tax				118.60
Income taxexpense				59.30

Netincome			$	59.30

Reconciliation of Net Income to Net Cash Flows from Operating Activities ($ in millions)
Netincome	$	59.30

Adjustments fornoncash effects:
Depreciationexpense		9.10
Patent amortizationexpense		3.10
Loss on sale ofland		5.10
Gain on sale ofinvestment		(23.10	)
Decrease in accountsreceivable		5.10
Increase ininventory		(11.10	)
Increase in accountspayable		17.10
Decrease in bonddiscount		.10
Increase in salariespayable		5.10
Decrease in prepaidinsurance		3.10
Increase in income taxpayable		9.10

Net cash flowsfrom operating activities	$	82.00

Cash Flows from Operating Activities: Cash received from customers Cash increase from sale of cash equivalents Cash paid to suppliers Cash paid to employees Cash paid for interest Cash paid for insurance Cash paid for income taxes Net cash flows from operating activities

Revenues and gains:
Sales	$	324.00
Gain on sale of cash equivalents		2.70
Gain on sale of investments		24.70	$	351.40

Expenses and loss:
Cost of goods sold	$	127.00
Salaries		40.70
Interest expense		12.70
Insurance		20.70
Depreciation		10.70
Patent amortization		4.70
Loss on sale of land		6.70		223.20

Income before tax				128.20
Income tax expense				64.10

Net income			$	64.10

Reconciliation of Net Income to Net Cash Flows from Operating Activities ($ in millions)
Net income	$	64.10

Adjustments for noncash effects:
Depreciation expense		10.70
Patent amortization expense		4.70
Loss on sale of land		6.70
Gain on sale of investment		(24.70	)
Decrease in accounts receivable		6.70
Increase in inventory		(12.70	)
Increase in accounts payable		18.70
Decrease in bond discount		1.70
Increase in salaries payable		6.70
Decrease in prepaid insurance		4.70
Increase in income tax payable		10.70

Net cash flows from operating activities	$	98.00

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