During 20X2, Wilmont Company performed services for which customers promised to pay $286,000. Of this amount, $270,000 had been collected by year end. Wilmont paid $125,000 in cash for employee wages and owed the employees $5,000 at the end of the year for work that had been done but had not paid for. Wilmont paid interest expense of $1,700 and $80,000 for other service expenses. The income tax rate was 25%, and income taxes had not yet been paid at the end of the year. Wilmont declared and paid dividends of $6,000. There were no other events that affected cash. Required:
1. What was the amount of the increase or decrease in cash during the year?
2. Prepare an income statement for Wilmont for the year.

Question

During 20X2, Wilmont Company performed services for which customers promised to pay $286,000. Of this amount, $270,000 had been collected by year end. Wilmont paid $125,000 in cash for employee wages and owed the employees $5,000 at the end of the year for work that had been done but had not paid for. Wilmont paid interest expense of $1,700 and $80,000 for other service expenses. The income tax rate was 25%, and income taxes had not yet been paid at the end of the year. Wilmont declared and paid dividends of $6,000. There were no other events that affected cash. Required: 
1. What was the amount of the increase or decrease in cash during the year? 
2. Prepare an income statement for Wilmont for the year.

Quizplus · Accepted Answer

The Answer of During 20X2, Wilmont Company performed services for which customers promised to pay $286,000. Of this amount, $270,000 had been collected by year end. Wilmont paid $125,000 in cash for employee wages and owed the employees $5,000 at the end of the year for work that had been done but had not paid for. Wilmont paid interest expense of $1,700 and $80,000 for other service expenses. The income tax rate was 25%, and income taxes had not yet been paid at the end of the year. Wilmont declared and paid dividends of $6,000. There were no other events that affected cash. Required: 
1. What was the amount of the increase or decrease in cash during the year? 
2. Prepare an income statement for Wilmont for the year.

During 20X2, Wilmont Company Performed Services for Which Customers Promised