Concept explainers
a)
Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.
Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system
Rules of Debit and Credit:
Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
- Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
- Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.
To Determine: The amount of cash paid for income taxes during the reporting period.
b)
To Journalize: The amount of cash paid for income taxes during the reporting period, under the given situations.
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INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
- On April 1, Splish Brothers Inc. began operations. The following transactions were completed during the month. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. + Issued common stock for $21,100 cash. Obtained a bank loan for $6,200 by issuing a note payable. Paid $9,700 cash to buy equipment. Paid $1,100 cash for April office rent. Paid $1,300 for supplies. Purchased $530 of advertising in the Daily Herald, on account. Performed services for $15,800: cash of $1,760 was received from customers, and the balance of $14,040 was billed to customers on account. Paid $350 cash dividend to stockholders. Paid the utility bill for the month, $1,760. Paid Daily Herald the amount due in transaction (6). Paid $40 of interest on the bank loan obtained in transaction (2). Paid employees' salaries, $5,630. Received $10,560 cash from customers billed in transaction (7). Paid income tax, $1,320. Account Titles and Explanation Cash Common Stock Cash Notes Payable Equipment Cash Rent Expense Debit 21,100…arrow_forwardIn reviewing the Accounts Receivable, the Net Cash Realizable Value is __ before a write off of $1500. What is the Net Cash Realizable Value after the write off?a. $16,000b. $1500c. $17300d. $14500arrow_forward_______________ 4. When accounts receivable is factored, the accounts payable shall be credited. True or False?_______________ 5. The interest on a non-interest bearing note is equal to its discount amount._______________ 6. The practice of realizing cash from accounts receivable before its maturity date is widespread. Defalcation is one of them. True or False?arrow_forward
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