| Portions of the financial statements for Parnell Company are provided below. |
| PARNELL COMPANY Income Statement For the Year Ended December 31, 2016 ($ in 000s) |
| Revenues and gains: | |||||
| Sales | $740 | ||||
| Gain on sale of buildings | 12 | $ | 752 | ||
| Expenses and loss: | |||||
| Cost of goods sold | $270 | ||||
| Salaries | 114 | ||||
| Insurance | 34 | ||||
| Depreciation | 117 | ||||
| Interest expense | 44 | ||||
| Loss on sale of machinery | 11 | 590 | |||
| Income before tax | 162 | ||||
| Income tax expense | 81 | ||||
| Net income | $ | 81 | |||
| PARNELL COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2016 and 2015 ($ in 000s) |
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| Year | ||||
| 2016 | 2015 | Change | ||
| Cash | $128 | $106 | $22 | |
| Accounts receivable | 318 | 222 | 96 | |
| Inventory | 327 | 419 | (92 | ) |
| Prepaid insurance | 67 | 82 | (15 | ) |
| Accounts payable | 204 | 123 | 81 | |
| Salaries payable | 114 | 99 | 15 | |
| Deferred income tax liability | 72 | 58 | 14 | |
| Bond discount | 178 | 206 | (28 | ) |
| Required: | ||||
| 1. | Prepare the cash flows from operating activities section of the statement of cash flows for Parnell Company using the direct method. (Enter your answers in thousands (i.e., 5,000 should be entered as 5). Amounts to be deducted should be indicated with a minus sign.)
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