During? 2011, People ?Direct, Inc., incurred salary expense of $ 65 comma 000?,

Question

During? 2011, People ?Direct, Inc., incurred salary expense of $ 65 comma 000?, as shown on the income statement. The January? 1, 2011, balance sheet showed salaries payable of $ 9 comma 150?; and the December? 31, 2011, balance sheet showed salaries payable of $ 13 comma 150. What adjustment to net income would be shown in the operating section of the statement of cash flows prepared using the indirect method related to this? information? How much cash was paid to employees? (for salary) during? 2011?

Explanation / Answer

Salary expense for 2011 (as per income statement) $    65,000 Adjustments: Less: Increase in salaries payable: Salaries payable, Dcember 31, 2011 $   13,150 Less: Salaries payable, January 1, 2011 $      9,150 $      4,000 Cash paid to employees (for salary) during 2011 $    61,000

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