Q#8: Legit Enterprises has asked for your accounting assistance and provides the following information: (1) Selected...

Transcribed Image Text:

Q#8: Legit Enterprises has asked for your accounting assistance and provides the following information: (1) Selected cash inflows and outflows reported by Legit for the twelve months ended 12/31/20X1 and 12/31/20X2: Twelve Months ended: Cash activity: 12/31/X1 12/31/X2 Cash Collected from customers $170,000 $190,000 Cash paid for wages (90,000) (110,000) Cash paid for utilities (18,000) (27,000) Cash paid for insurance (22,000) (19,000) (2) Selected 12/31st account balances from Legit's accrual basis balance sheet: Accrual basis account balances: 12/31/X0 12/31/X1 12/31/X2 Accounts Receivable $16,000 $28,000 $23,000 Prepaid Insurance Expense 8,800 7,700 9,400 Wages Payable 5,200 6,000 7,400 Utilities Payable 1,800 3,400 2,700 For purposes of this question, ignore Accounts Receivable and Wages. Consider the Insurance Expense and Utilities Expense that Legit would report on its accrual basis income statement for the twelve months ended 12/31/X2 and select the answer below that shows the combined cash outflow for these two items. A. $43,600 B. $45,300 C. $46,000 D. $44,300 E. None of the answer choices provided are correct. Q#8: Legit Enterprises has asked for your accounting assistance and provides the following information: (1) Selected cash inflows and outflows reported by Legit for the twelve months ended 12/31/20X1 and 12/31/20X2: Twelve Months ended: Cash activity: 12/31/X1 12/31/X2 Cash Collected from customers $170,000 $190,000 Cash paid for wages (90,000) (110,000) Cash paid for utilities (18,000) (27,000) Cash paid for insurance (22,000) (19,000) (2) Selected 12/31st account balances from Legit's accrual basis balance sheet: Accrual basis account balances: 12/31/X0 12/31/X1 12/31/X2 Accounts Receivable $16,000 $28,000 $23,000 Prepaid Insurance Expense 8,800 7,700 9,400 Wages Payable 5,200 6,000 7,400 Utilities Payable 1,800 3,400 2,700 For purposes of this question, ignore Accounts Receivable and Wages. Consider the Insurance Expense and Utilities Expense that Legit would report on its accrual basis income statement for the twelve months ended 12/31/X2 and select the answer below that shows the combined cash outflow for these two items. A. $43,600 B. $45,300 C. $46,000 D. $44,300 E. None of the answer choices provided are correct.