For each of the following independent cases, use the information provided to calculate the missing cash inflow or cash outflow using the direct method.(a.)Interest payable, beginning-year……………………...$?4,200?Interest expense……………………………………….?26,700?Interest payable, year-end…………………………….?3,000?Cash paid for interest…………………………………$? ________????(b.)Prepaid insurance, beginning-year……………………$? 7,000?Insurance expense……………………………………..?16,800?Prepaid insurance, year-end…………………………...?3,400?Cash paid for insurance………………………………..$? ________????(c.)Interest receivable,
beginning-year……………………$? 800?Interest revenue………………………………………..?12,600?Interest receivable, year-end…………………………..?1,200?Cash received for interest……………………………..$? ________????(d.)Accounts payable, beginning-year…………………….$? 60,000?Cost of goods sold……………………………………..?244,000?Merchandise inventory, beginning-year……………….?35,000?Merchandise inventory, year-end……………………?40,500?Accounts payable, year-end……………………………?64,800?Cash paid for merchandise…………………………….$? ________
What will be an ideal response?
| (a.) | Interest expense……………………………………………... | $ 26,700 |
| ? | Decrease in interest payable ($4,200 ? $3,000)……………... | 1,200 |
| ? | Cash paid for interest……………………………………….. | $ 27,900 |
| ? | ? | ? |
| (b.) | Insurance expense……………………………………........... | $ 16,800 |
| ? | Decrease in prepaid insurance ($7,000 ? $3,400)………… | (3,600) |
| ? | Cash paid for insurance………………………………........... | $ 13,200 |
| ? | ? | ? |
| (c.) | Interest revenue………………………………………........... | $ 12,600 |
| ? | Increase in interest receivable ($1,200 ? $800)………........... | (400) |
| ? | Cash received for interest…………………………………… | $ 12,200 |
| ? | ? | ? |
| (d.) | Cost of goods sold………………………………………….. | $244,000 |
| ? | Increase in merchandise inventory ($40,500 ? $35,000)……. | 5,500 |
| ? | Merchandise purchases…………………………………… | 249,500 |
| ? | Increase in accounts payable ($64,800 ? $60,000)………….. | (4,800) |
| ? | Cash paid for merchandise………………………………….. | $244,700 |
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