Question

Spa Company uses the direct method in determining net cash provided by operating activities. The income statement shows income tax expense $85,000. Income taxes payable were $35,000 at the beginning of the year and $20,000 at the end of the year. Cash payments for income taxes are $ _____

Answer 1

TOTAL $ 100.000

Step-by-step explanation:

Statement of Cash Flows Direct Method

Income Tax Expense $ 85,000

Income Tax Payable $ 15,000

TOTAL $ 100.000

Formula of Cash Flows Direct Method for Income Statement:

Payments = Income tax expense + Beginning TP - Ending TP

Statement of Cash Flows Direct Method

Income Tax Expense $ 85,000

Income Tax Payable $ 15,000

TOTAL $ 100,000

Income Tax Payable Beginning $ 30,000

Income Tax Payable Final $ 15,000

Extra payment of t $ 20,000