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Flax Corp. uses the direct method to prepare its statement of cash flows. Flax's trial balances at December 31, Year 6 and Year 5, are
Flax Corp. uses the direct method to prepare its statement of cash flows. Flax's trial balances at December 31, Year 6 and Year 5, are as follows December 31 December 31 Credits Year 6 Year 5 $ 35,000 $ 32,000 33,00030,000 31,000 47,000 Property, plant, & equipment 100,000 95,000 4,500 5,000 250,000 380,000 141,500 172,000 Year 6 Year 5 Allowance for uncollectible accounts$ 1,300 $ 1,100 16,500 5,000 25,00017,500 21,00027,100 4,600 45,000 20,000 50,00040,000 9,1007,500 44,70064,600 538,800 778,700 $756,700 $976,100 Debits Cash Accounts receivable Inventory Accumulated depreciation Trade accounts payable Income taxes payable Deferred income taxes 8% callable bonds payable Common stock Additional paid-in capital Retained earnings Sales 5,300 Unamortized bond discount Cost of goods sold Selling expenses General and administrative expenses Interest expense Income tax expense 137,000 151,300 4,3002,600 20,40061,200 $756,700 $976,100 Flax allocated one-third of its depreciation expense to selling expenses and the remainder to general and administrative expenses, which include the provision for uncollectible accounts . Flax purchased $5,000 in equipment during Year 6 . What amount should Flax report in its statement of cash flows for the year ended December 31, Year 6, for cash paid for income taxes? A. $19,700 B. $20,400 C. $15,000 D. $25,800
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