The profit or loss section of the statement of comprehensive income of ITS NOT OK TO BE OK Company for the year ended December 31, 2020 is reproduced below: P 6,100,000 3,700,000 Sales Cost of goods sold Gross profit Gain on sale of equipment P2,400,000 100,000 Salaries expense -820,000 Insurance expense -380,000 Depreciation expense 220,000 Profit before interest and income tax P1,080,000 Interest expense 120,000 P960,000 Profit before income tax Income tax expense 288,000 Profit P672,000 The following information is also available: Decrease in accounts receiva P12 000 Increase in inventory 280,000 Decrease in accounts payable 160,000 Increase in salaries payable 100,000 Increase in prepaid insurance 180,000 Decrease in interest payable 30,000 Increase in income tax payable 18,000 Required: Prepare ITS OK NOT TO BE OK Company's 2020 Statement of Cash Flows using the direct method.
The profit or loss section of the statement of comprehensive income of ITS NOT OK TO BE OK Company for the year ended December 31, 2020 is reproduced below: P 6,100,000 3,700,000 Sales Cost of goods sold Gross profit Gain on sale of equipment P2,400,000 100,000 Salaries expense -820,000 Insurance expense -380,000 Depreciation expense 220,000 Profit before interest and income tax P1,080,000 Interest expense 120,000 P960,000 Profit before income tax Income tax expense 288,000 Profit P672,000 The following information is also available: Decrease in accounts receiva P12 000 Increase in inventory 280,000 Decrease in accounts payable 160,000 Increase in salaries payable 100,000 Increase in prepaid insurance 180,000 Decrease in interest payable 30,000 Increase in income tax payable 18,000 Required: Prepare ITS OK NOT TO BE OK Company's 2020 Statement of Cash Flows using the direct method.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 9P: LIFO Liquidation Profit Hammond Company adopted LIFO when it was formed on January 1, 2017. Since...
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PROBLEM SOLVING 1
The profit or loss section of the statement of comprehensive income of ITS NOT OK TO BE OK Company
for the year ended December 31, 2020 is reproduced below:
Sales P 6,100,000
Cost of goods sold 3,700,000
Gross profit P2,400,000
Gain on sale of equipment 100,000
Salaries expense -820,000
Insurance expense -380,000
Depreciation expense 220,000
Profit before interest and income tax P1,080,000
Interest expense 120,000
Profit before income tax P960,000
Income tax expense 288,000
Profit P672,000
The following information is also available:
Decrease in accounts receivable P120,000
Increase in inventory 280,000
Decrease in accounts payable 160,000
Increase in salaries payable 100,000
Increase in prepaid insurance 180,000
Decrease in interest payable 30,000
Increase in income tax payable 18,000
Transcribed Image Text:PROBLEM SOLVING 1
The profit or loss section of the statement of comprehensive income of ITS NOT OK TO BE OK Company
for the year ended December 31, 2020 is reproduced below:
Sales
P 6,100,000
Cost of goods sold
Gross profit
Gain on sale of equipment
3,700,000
P2,400,000
100,000
Salaries expense
-820,000
Insurance expense
-380,000
Depreciation expense
220,000
Profit before interest and income tax
P1,080,000
Interest expense
120.000
Profit before income tax
P960,000
288,000
P672,000
Income tax expense
Profit
The following information is also available:
Decrease in accounts receivable
P120,000
Increase in inventory
280,000
Decrease in accounts payable
160,000
Increase in salaries payable
100,000
Increase in prepaid insurance
180,000
Decrease in interest payable
30,000
Increase in income tax payable
18,000
Required: Prepare ITS OK NOT TO BE OK Company's 2020 Statement of Cash Flows using the direct
method.
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