Problem 13-3A (Direct Method) The income statement for Tremblant Limited is pres

Question

Problem 13-3A (Direct Method) The income statement for Tremblant Limited is presented here TREMBLANT LIMITED Income Statement Year Ended December 31, 2015 Service revenue Operating expenses Profit from operations Interest expense Profit before income tax Income tax expense Profit $930,400 719,200 211,200 75,770 135,430 36,900 $98,530 Tremblant's statement of financial position contained these comparative data at December 31 2015 2014 Accounts receivable Prepaid expenses Accounts payable Salaries payable Unearned revenue Interest payable Income tax payable $56,480 12,660 35,800 19,120 12,060 6,750 4,610 $52,630 15,920 41,410 20,050 8,150 4,860 9,090 Additional information: 1. Operating expenses include depreciation expense, $48,860; amortization expense, 15,670; administrative expenses, $120,400; salaries expense,?510,090; and loss on the disposal of equipment, 2. Unearned revenue is received from customers. 3. Prepaid expenses and accounts payable relate to operating (administrative) expenses. $24,180

Explanation / Answer

Sales 930400 Adjustments to a cash basis Unearned revenue 2014 -8150 Unearned revenue 2015 12060 Accounts receivable as per 2014 52630 Accounts receivable as per 2015 -56480 930460 Less Salaries expense 510090 Adjustments to a cash basis Salaries payable as per 2014 20050 Salaries payable as per 2015 -19120 511020 Operating expense less depreciation 120400 Adjustments to a cash basis Prepaid expense 2014 -15920 Prepaid expense 2015 12660 Accrued liabilities 2014 41410 Accrued liabilities 2015 -35800 122750 Interest expense 75770 Adjustments to a cash basis Interest expense payable 2014 4860 Interets expense payable 2015 -6750 73880 Income tax 36900 Adjustments to a cash basis Income tax payable 2014 9090 Income tax payable 2015 -4610 41380 Cash flow from operating activities 181430

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