Adjustment 2 Income Statement Adjustment 1 Cash Flows (if needed) Sales Revenue $ 31,500,000 (1,205,000) (295,000) $ 30,000,000 Cost of Goods Sold (26,250,000)| (1,925,000) 175,000 (28,000,000) Rent Expense (840,000) (180,000) (1,020,000 Utilities Expense (500,000) 0 (500,000) Depreciation Expense (850,000) 850,000 0 Bad Debts Expense (536,000) 536,000 0 Interest Expense (1,300,000) (160,000) (1,460,000 Loss on Sale of Building (640,000) 640,000 0 Gain on Sale of Land 540,000 (540,000) 0 Income Tax Expense (449,600) 244,100 (205,500) Net Income $ 674,400 $ (1,185,500) The worksheet above was created by KnK, Inc. to help prepare the operating section of their statement of cash flows for the year ended Dec 31, 20X5. Using the information in the worksheet, answer the following questions: 1. If Knk reported an Accounts Receivable balance (as of January 1, 20X5) of $6,000,000, what Accounts Receivable balance will be reported on their December 31, 20X5 balance sheet? Accounts Recivable Balance, Dec 31, 20X5 2. If Knk reported an Interest Payable balance (as of January 1, 20X5) of $250,000, what Interest Payable balance will be reported on their December 31, 20X5 balance sheet? Interest Payable Balance, Dec 31, 20X5 3. If Knk reported an Allowance for Doubtful Accounts balance (as of January 1, 20X5) of $775,000, what Allowance balance will be reported on their December 31, 20X5 balance sheet? Allowance for Doubtful Accounts Balance, Dec 31, 20X5 4. Create an operating section using the indirect format. 4. Create an operating section using the indirect format. Indirect Statement of Cash Flows Requirement Complete the operating section of the statement of cash flows below using the indirect format. Western Resources Statement of Cash Flows (Indirect format) For the Period Ended Dec. 31, 20X5 Cash Flows from Operating Activities Net Income Adjustments to reconcile net income to cash generated by operating activities: Changes in operating assets and liabilities: Net Cash Inflowl(Outflow) Operating Activities $ 0 Adjustment 2 Income Statement Adjustment 1 Cash Flows (if needed) Sales Revenue $ 31,500,000 (1,205,000) (295,000) $ 30,000,000 Cost of Goods Sold (26,250,000)| (1,925,000) 175,000 (28,000,000) Rent Expense (840,000) (180,000) (1,020,000 Utilities Expense (500,000) 0 (500,000) Depreciation Expense (850,000) 850,000 0 Bad Debts Expense (536,000) 536,000 0 Interest Expense (1,300,000) (160,000) (1,460,000 Loss on Sale of Building (640,000) 640,000 0 Gain on Sale of Land 540,000 (540,000) 0 Income Tax Expense (449,600) 244,100 (205,500) Net Income $ 674,400 $ (1,185,500) The worksheet above was created by KnK, Inc. to help prepare the operating section of their statement of cash flows for the year ended Dec 31, 20X5. Using the information in the worksheet, answer the following questions: 1. If Knk reported an Accounts Receivable balance (as of January 1, 20X5) of $6,000,000, what Accounts Receivable balance will be reported on their December 31, 20X5 balance sheet? Accounts Recivable Balance, Dec 31, 20X5 2. If Knk reported an Interest Payable balance (as of January 1, 20X5) of $250,000, what Interest Payable balance will be reported on their December 31, 20X5 balance sheet? Interest Payable Balance, Dec 31, 20X5 3. If Knk reported an Allowance for Doubtful Accounts balance (as of January 1, 20X5) of $775,000, what Allowance balance will be reported on their December 31, 20X5 balance sheet? Allowance for Doubtful Accounts Balance, Dec 31, 20X5 4. Create an operating section using the indirect format. 4. Create an operating section using the indirect format. Indirect Statement of Cash Flows Requirement Complete the operating section of the statement of cash flows below using the indirect format. Western Resources Statement of Cash Flows (Indirect format) For the Period Ended Dec. 31, 20X5 Cash Flows from Operating Activities Net Income Adjustments to reconcile net income to cash generated by operating activities: Changes in operating assets and liabilities: Net Cash Inflowl(Outflow) Operating Activities $ 0