Income Statement For the year ended 12/31/12 Sale $85,000 Cost of goods sold $45
ID: 2378828 • Letter: I
Question
Income StatementFor the year ended 12/31/12
Sale
$85,000
Cost of goods sold
$45,000
Gross margin
$40,000
Operating expenses
Depreciation 6000
Selling and Admin 8000
Total
$14,000
Operating Income
$26,000
Gain on sales of Investments
$4,000
Interest Expense
$2,000
Income before taxes
$28,000
Income tax expense
$5,600
Net Income
$22,400
Partial Balance Sheet
2012 2011 Difference
Cash
$20,000
Accounts Receivable (net) $80,000 $67,000 $13,000
Inventory
$12,000 $11,500 $500
Prepaid Insurance
$5,000 $6,000 ($1,000)
Patents
$11,000 $10,000 $1,000
$0
Accounts Payable
$55,000 $70,000 ($15,000)
Accured Expenses
$30,000 $40,000 ($10,000)
Income tax payable
$7,000 $4,000 $3,000
Deferred Taxes
$45,000 $44,900 $100
Unamortized bond discount decreased by $200
Using the direct method and following the above instructions answer each of the requirements showing all calculations. Requirement 1
Cash paid to suppliers
Requirement 2
Determine cash paid for operating expenses
Requirement 3
Determine cash paid for interest
Requirement 4
Determine cash paid for income taxes
Income Statement
For the year ended 12/31/12
Sale
$85,000
Cost of goods sold
$45,000
Gross margin
$40,000
Operating expenses
Depreciation 6000
Selling and Admin 8000
Total
$14,000
Operating Income
$26,000
Gain on sales of Investments
$4,000
Interest Expense
$2,000
Income before taxes
$28,000
Income tax expense
$5,600
Net Income
$22,400
Partial Balance Sheet
2012 2011 Difference
Cash
$20,000
Accounts Receivable (net) $80,000 $67,000 $13,000
Inventory
$12,000 $11,500 $500
Prepaid Insurance
$5,000 $6,000 ($1,000)
Patents
$11,000 $10,000 $1,000
$0
Accounts Payable
$55,000 $70,000 ($15,000)
Accured Expenses
$30,000 $40,000 ($10,000)
Income tax payable
$7,000 $4,000 $3,000
Deferred Taxes
$45,000 $44,900 $100
Unamortized bond discount decreased by $200
Using the direct method and following the above instructions answer each of the requirements showing all calculations. Requirement 1
Cash paid to suppliers
Requirement 2
Determine cash paid for operating expenses
Requirement 3
Determine cash paid for interest
Requirement 4
Determine cash paid for income taxes
Explanation / Answer
1. $70000-$55000+$10000=$25000
2. $8000+$10000=$18000
3. $2000
4.$5600+$4000-$7000=$2600