Fill in the blank for each of the following situations. Balance Sheet Beginning
ID: 2381838 • Letter: F
Question
Fill in the blank for each of the following situations.
Balance Sheet
Beginning
Ending
Income Statement
Cash Inflow (Outflow)
Accounts Receivable
$2,000
$5,000
Sales on Account, $15,000
Inflow of $12,000
Prepaid Insurance
$4,000
$3,000
Insurance expense, $7,000
Outflow of $6,000
Income Taxes payable
$6,000
$9,000
Income Tax expense, $20,000
Outflow of $35,000
Wages Payable
$5,000
$3,000
Wages expense, $25,000
Outflow of $27,000
I am trying to make sure I did this problem corrrectly. The highlighted is the blank in each situation.
Balance Sheet
Beginning
Ending
Income Statement
Cash Inflow (Outflow)
Accounts Receivable
$2,000
$5,000
Sales on Account, $15,000
Inflow of $12,000
Prepaid Insurance
$4,000
$3,000
Insurance expense, $7,000
Outflow of $6,000
Income Taxes payable
$6,000
$9,000
Income Tax expense, $20,000
Outflow of $35,000
Wages Payable
$5,000
$3,000
Wages expense, $25,000
Outflow of $27,000
Explanation / Answer
Accounts Receivable is correct, if the balance increase that means you did not actually receive cash but still recorded the sale so you would reduce your inflow by $3,000 from the $15,000 recorded sales. Prepaid insurance is correct, went down so that means that that they recorded more expense than what they actually paid out, since the prepaid insurance was paid in a prior period. You would reduce the outflow by $1,000 from the $7,000 expense. Income tax payable is not correct, it is treated just like any other payable account, they recorded an additional $3,000 of expense but have not paid it yet so you would reduce the $20,000 of income tax expense by $3,000 to get an actual cash outflow of $17,000. Wages payable is correct, since the payable went down by $2,000 that means they had an outflow of an additional $2,000 in addition to the $25,000 expense recorded.
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