Question

Information related to various financial statement elements is provided for three cases:
Case A Tax expense was $341,400. The deferred tax liability had an opening balance of $92,000 and a closing balance of $103,000. Income tax payable declined by $22,400 during the year.
Case B Interest expense was $174,000. Discount amortization was $10,000 during the year. Interest payable had an opening balance of $11,000 and a closing balance of $13,400.
Case C Interest revenue was $87,000. Interest receivable had an opening balance of $14,400 and a closing balance of $8,200.

Required:

For each case, calculate the cash inflow or outflow related to the revenue or expense.

Answer 1

		Cash flow
Case A	($341,400) Income tax expense  11,000 Deferred tax liability increase (22,400) Income tax payable decreased	$ (352,800)
Case B	$(174,000) Interest expense  10,000 Discount amortization – non cash  2,400 Interest payable increase	$ (161,600)
Case C	$ 87,000 Interest revenue  6,200 Interest receivable decrease	$ 93,200