Question
Income Statement for the year: Sales $ 750,000 Cost of Goods Sold 530,000 Gross Profit $ 220,000 Operating Expenses 130,000 Net Income before Taxes $
Income Statement for the year:
Sales $ 750,000
Cost of Goods Sold 530,000
Gross Profit $ 220,000
Operating Expenses 130,000
Net Income before Taxes $ 90,000
Taxes 15,000
Net Income $ 75,000
Account Balance Changes during the year:
Inventory increase $17,000
Accounts Receivable increase $52,000
Depreciation increase $43,000
Prepaid expenses decrease $ 1,000
Accounts Payable for inventory increase $12,000
Accrued liabilities (e.g., Wages Payable) decrease $ 9,000
Taxes Payable decrease $ 4,000
What was the amount of cash payments for taxes this year, using the direct method?
a. $24,000 b. $19,000
c. $11,000 d. $15,000
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Using Financial Accounting Information The Alternative to Debits and Credits
Authors: Gary A. Porter, Curtis L. Norton
7th Edition
978-0-538-4527, 0-538-45274-9, 978-1133161646
