Mayes Corporation reported utilities expense of $18,200 on its income statement for Year 1. For the year, the beginning balance in Utilities Payable was $2,500 and the ending balance was $1,500. The amount of cash that Mayes paid for utilities in Year 1 was $19,200.

Question

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The cash paid for utilities is calculated by adjusting the reported expense for the change in Utilities Payable: $18,200 (expense) + $2,500 (beginning payable) - $1,500 (ending payable) = $19,200.

Mayes Corporation Reported Utilities Expense of $18,200 on Its Income