Following Are the Income Statement and Other Information for Knox

question 129

Essay

Following are the income statement and other information for Knox Corporation.
$\begin{array}{c}\text { Knox Corporation }\\\text { Income Statement }\\\text { For the Year Ended December \( 31,20 x x \)}\\\begin{array}{lc}\text { Sales } && \$ 3,000 \\\text { Cost of goods sold }& & 1,500 \\\text { Gross margin } && \$ 1,500\\\text { Operating expenses } & \$ 600 \\\text { Depreciation expense } & 300&900\\\text {Income before income taxes}&&\$600\\\text {Income taxes expense}&&150\\\text {Net income}&&\$450\end{array}\end{array}$
Accounts receivable (net)decreased by $750 during the year.Inventory increased by $450,and Accounts Payable decreased by $600 during the year.Income Taxes Payable increased by $150 during the year.
Prepare a schedule of cash flows from operating activities using the indirect method.

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Definitions:

Unamortized Patent

The portion of a patent's purchase cost that has not yet been expensed in the company's financial statements over the patent's useful life.

Investment Account Balance

The total value of all the securities and cash in an investment account at any given time, reflecting purchases, sales, gains, and losses.

Equity Method

This approach adjusts the value of an investment based on the proportional changes in the investee's net assets, reflecting the investor's ownership interest.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, representing the value of the brand, customer base, and other non-tangible assets.