Selected balance sheet and income statement data for Fowler Inc. are presented below. The company uses the direct method in preparing its statement of cash flows.

- Refer to Exhibit 13-4. Given the information above, cash paid for wages is

Question

Selected balance sheet and income statement data for Fowler Inc. are presented below. The company uses the direct method in preparing its statement of cash flows.

- Refer to Exhibit 13-4. Given the information above, cash paid for wages is

Quizplus · Accepted Answer

To determine cash paid for wages, we need to look at the increase/decrease in accounts payable for wages and the amount of wages expense recognized on the income statement. From the balance sheet data, we can see that accounts payable for wages decreased by $2,000 ($16,000 - $14,000). From the income statement data, we can see that wages expense was $30,000. To calculate cash paid for wages, we need to subtract the decrease in accounts payable from wages expense: 
$30,000 - $2,000 = $28,000. Therefore, the answer is A) $28,000.

Selected Balance Sheet and Income Statement Data for Fowler Inc