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Wiley Company's income statement for Year 2 follows: $ 2,850 1,500 1,350 Sales Cost of goods sold Gross margin Selling and administrative expenses Income before taxes Income taxes Net income The company's selling and administrative expense for Year 2 includes $78 of depreciation expense. Selected balance sheet accounts for Wiley at the end of Years 1 and 2 are as follows: Current Assets Accounts receivable Inventory Prepaid expenses Current Liabilities Accounts payable Accrued liabilities Income taxes payable Year 2 $ 215 $ 164 $ 40 500 850 340 $ 510 $ 107 $ 14 $ 110 Year 1 $ 255 $ 180 $ 21 $80 $ 28 $80

Wiley Company's income statement for Year 2 follows: $ 2,850 1,500 1,350 Sales Cost of goods sold Gross margin Selling and administrative expenses Income before taxes Income taxes Net income The company's selling and administrative expense for Year 2 includes $78 of depreciation expense. Selected balance sheet accounts for Wiley at the end of Years 1 and 2 are as follows: Current Assets Accounts receivable Inventory Prepaid expenses Current Liabilities Accounts payable Accrued liabilities Income taxes payable Year 2 $ 215 $ 164 $ 40 500 850 340 $ 510 $ 107 $ 14 $ 110 Year 1 $ 255 $ 180 $ 21 $80 $ 28 $80

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Wiley Company's income statement for Year 2 follows: Sales. Cost of goods sold Gross margin Selling and administrative expenses Income before taxes Income taxes Net income Current Assets Accounts receivable Inventory Prepaid expenses Current Liabilities Accounts payable Accrued liabilities Income taxes payable Required 1 Required 2 Adjustments to a cash basis: Year 2 Adjustments to a cash basis: The company's selling and administrative expense for Year 2 includes $78 of depreciation expense. Selected balance sheet accounts for Wiley at the end of Years 1 and 2 are as follows: $ 215 $164 $ 40 Selling and administrative expenses Adjustments to a cash basis: Income taxes Adjustments to a cash basis: ***** $ 107 $ 14 $ 110 $ 2,850 Year 1 1,500 $ 255 $ 180 $ 21 1,350 500 850 $80. $ 28 $ 80 Using the direct method, convert the company's income statement to a cash basis. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) 340 $ 510 Wiley Company Direct Method of Determining the Net Cash flows from Operating activities
Transcribed Image Text:1. Wiley Company's income statement for Year 2 follows: Sales. Cost of goods sold Gross margin Selling and administrative expenses Income before taxes Income taxes Net income Current Assets Accounts receivable Inventory Prepaid expenses Current Liabilities Accounts payable Accrued liabilities Income taxes payable Required 1 Required 2 Adjustments to a cash basis: Year 2 Adjustments to a cash basis: The company's selling and administrative expense for Year 2 includes $78 of depreciation expense. Selected balance sheet accounts for Wiley at the end of Years 1 and 2 are as follows: $ 215 $164 $ 40 Selling and administrative expenses Adjustments to a cash basis: Income taxes Adjustments to a cash basis: ***** $ 107 $ 14 $ 110 $ 2,850 Year 1 1,500 $ 255 $ 180 $ 21 1,350 500 850 $80. $ 28 $ 80 Using the direct method, convert the company's income statement to a cash basis. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) 340 $ 510 Wiley Company Direct Method of Determining the Net Cash flows from Operating activities
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