Introduction:
Operating expense is the expense the business causes in selling merchandise or giving administration and dealing with the organization. These are generally isolated into selling and regulatory expense and incorporates a thing, for example, promoting expense, pay rates, and wages, protection expense, utility expense, property charge expense, and devaluation. These are perceived when products and administration are utilized, not when money is paid. In this manner, the expense sums provided details regarding the announcement will most likely not equivalent the measure of money really paid amid the present time frame.
To choose:
Compute the amount of cash payment for operating expense using the direct method.
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Cornerstones of Financial Accounting
- Determining Cash Flows from Financing Activities Solomon Construction Company reported the following amount on its balance sheet at the end of 2019 and 2018 for notes payable: Required: 1. If Solomon did not repay any notes payable during 2019, determine how much cash Solomon received from the issuance of notes payable. 2. If Solomon repaid $40,000 of notes payable during 2019, determine what amounts Solomon would report in the financing activities section of the statement of cash flows.arrow_forwardCash Receipts from Customers Singleton Inc. had accounts receivable of $22,150 at January 1, 2019, and $26,850 at December 31, 2019. Net income for 2019 was $125,300 and sales revenue was $1,240,000. Required: Compute the amount of cash collected from customers using the direct method.arrow_forwardInterest and Income Taxes Staggs Company has prepared its 2019 statement of cash flows. In conjunction with this statement, it plans to disclose the interest and income taxes it paid during 2019. The following information is available from its 2019 income statement and beginning and ending balance sheet: Required: 1. Compute the amounts of interest paid and income taxes paid by Staggs for 2019. 2. Next Level Under IFRS, how would interest paid and income taxes paid be reported?arrow_forward
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- Donnelly Company's balance in Interest Payable was $80,000 at December 31, 2020 and $65,000 at December 31, 2019. Interest expense was $92,000 for 2020 and $84,000 for 2019. What amount of cash disbursements for Interest would be reported in Donnelly's 2020 net cash provided by operating activities presented on a direct basis? O a. $69,000 O b. $84,000 O C. $72,000 O d. S77,000arrow_forwardRyan Company's bookkeeper prepared the following 2019 statement of cash flows: Flows of Cash StatementDecember 31, 2019 Sources (Inflows) of Cash Net Source from Operations Net income $47,800 Add: Cash receipt from sale of land 6,500 Inflow from issuing 10% bonds payable 25,000 Depreciation expense 13,200 Reduction in inventory 1,900 Less: Outflow to buy equipment (16,400) Increase in prepaid expenses (700) Cash (principal) paid on long-term note (9,500) Ordinary gain (2,000) Total source from operations $65,800 Other Sources (Inflows) of Cash Loss on sale of land $2,300 Increase in accounts payable 1,000 Cash from issuing preferred stock 38,700 Patent amortization expense 2,100 Total other sources of cash 44,100 Sources (Financing) Not…arrow_forwardELS Corporation reported gross receipts for 2017-2019 for scenarios A, B, and C as follows: Year Scenario A Scenario B Scenario C 2017 $25,000,000 $24,000,000 $26,500,000 2018 $26,000,000 $26,000,000 $26,000,000 2019 $26,900,000 $28,500,000 $25,500,000 a) Is ELS allowed to use the cash method of accounting in 2020 under Scenario A? b) Is ELS allowed to use the cash method of accounting in 2020 under Scenario B? c) Is ELS allowed to use the cash method of accounting in 2020 under Scenario C?arrow_forward
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