During year 6, Kincaid, Inc. earned $85,000 of cash revenue. The company incurs all operating expenses on account. The year 6 begginning balance in Kincaid's account payable was $2,000, while the ending balance was $25,000. The company made cash payments of $40,000 to reduce accounts payable during year 6. Based on the information provided, determine the amount of operating expense recognized, the amount of net income earned, and the amount of cash flow from operating activities.

During year 6, Kincaid, Inc. earned $85,000 of cash revenue. The company incurs all operating expenses on account. The year 6 begginning balance in Kincaid's account payable was $2,000, while the ending balance was $25,000. The company made cash payments of $40,000 to reduce accounts payable during year 6. Based on the information provided, determine the amount of operating expense recognized, the amount of net income earned, and the amount of cash flow from operating activities.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 43P

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