The following information was taken from the 2021 financial statements of Gala Corporation:   Inventory, January 1, 2021                                  $   200,000 Inventory, December 31, 2021                                 240,000 Accounts payable, January 1, 2021                         150,000 Accounts payable, December 31, 2021                   240,000 Sales revenue                                                           1,200,000 Cost of goods sold                                                     1,100,000 If the direct method is used in the 2021 statement of cash flows, what amount should Gala Company report as cash payments to suppliers?

During 2021, equipment was sold for $500,000. The equipment cost $750,000 and had a book value of $432,000. Accumulated Depreciation—Equipment was $1,750,000 at 12/31/20 and $2,205,000 at 12/31/21. Depreciation expense for 2021 was

Taxable Income is $56,000. The ending balance needed in the deferred tax asset account is $17,000, and the beginning balance in the deferred tax asset account is $12,000. The ending balance needed in the deferred tax liability account is $12,000, and the beginning balance in the deferred tax liability account is $18,000. What is income tax expense for the year assuming a tax rate of 25%?

IU Corp.’s transactions for the year ended December 31, 2021 included the following: Purchased real estate for $2,000,000 cash.  Received dividends of $40,000 Sold available-for-sale securities for $1,000,000. Paid dividends of $1,200,000. Issued 500 shares of common stock for $500,000. Purchased machinery and equipment for $250,000 cash. Paid $900,000 toward a bank loan. Reduced accounts receivable by $200,000. Increased accounts payable $400,000. IU Corp.’s net cash used in investing activities for 2021 was

Assume that a lease has been correctly classified as a operating lease. The lease liability recognized at the beginning of the lease is $66,977. Annual payments of $15,000 are made at the beginning of the year, and the lessor’s rate of 6% is known to the lessee. The lease begins on January 1, 2021 and the first payment is made on that day. The lease is a five year lease.  Assuming that the first payment is made at the inception of the lease, what is the reduction to the right of use asset recognized at the end of the first year of the lease (December 31, 2021)? Remember – it’s an operating lease. How do you calculate the amortization amount for an operating lease?    

On January 2, 2021, Hanson Leasing Company leases equipment to Foley Co. with 6 equal annual payments of $240,000 each, payable beginning January 2, 2021. Foley Co. agrees to guarantee the $120,000 residual value of the asset at the end of the lease term. The expected value of the residual is $100,000. Foley’s incremental borrowing rate is 10%, however it knows that Hanson’s implicit interest rate is 8%. The journal entry Foley makes at January 2, 2021 includes a debit to right-of-use asset for?  

Grocers Co. leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. The lease agreement specified five equal payments at the beginning of each year. The useful life of the machine is expected to be five years. The fair value of the machine at the inception of the lease is $5.4 million. Grocer Co. guarantees a residual value of $6,000, but the expected value at the end of the lease is $10,000. Barton and Barton’s implicit interest rate was 12%. Based on the information, what is the annual lease payment? 

Pisa, Inc. leased equipment from Tower Company under a four-year lease requiring equal annual payments of $265,000, with the first payment due at lease inception. The lease does not transfer ownership, nor is there a bargain purchase option. The equipment has a 4-year useful life and no salvage value. Pisa, Inc.’s incremental borrowing rate is 10% and the rate implicit in the lease (which is known by Pisa, Inc.) is 8%. Assuming that this lease is properly classified as a finance lease, what is the amount of interest expense recorded by Pisa, Inc. in the first year of the lease?  

On January 1, 2022, ABC, Inc. purchased a machine for $1,700,000 which will be depreciated using straight-line for 7 years for financial statement reporting purposes (no salvage value) – resulting in depreciation of $242,857 each year. For income tax reporting, ABC elected to use a different method resulting in $371,429 for tax depreciation for 2022. Assume a present and future enacted income tax rate of 25%. This temporary difference will result in a deferred tax liability amount of what as of December 31, 2022?

This information was taken from the annual report of Jones Inc.     2021 2020 BALANCE SHEET     Income taxes payable $12,000 $11,000 Deferred income tax liability $24,000 $27,000       INCOME STATEMENT     Income before taxes $44,000   Income tax expense (18,000)   Net income $26,000         How much cash did Jones Inc.’s pay for taxes in 2021? Hint: Recreate the income tax expense journal entry to determine income taxes payable for the year. Then use that information to use a t-account and determine the amount of taxes paid in cash.