Determine the balance in the income taxes payable account

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Reference no: EM133275

Question 1

On 1^st January, 2008, ABC Company borrowed $200,000 from the bank. The loan is a 10-year note payable that needs semi-annual payments of $18,000 every June 30 and 31^st December, starting June 30, 2008.

Consider the loan has a 10% interest rate, compounded semi-annually.

Determine the amount of the note payable at December 31, 2008 that would be classified as a existing liability.

Question 2

The balance sheets for ABC Company at 1^st January, 2007 and 31^st December, 2007 are given below:

January 1, 2007 December 31, 2007

ASSETS

Cash 35,000 ?

Accounts receivable ? 97,000

Inventory ? 57,000

Land 80,000 90,000

Equipment 180,000 230,000

Accumulated depreciation <27,000> <41,000>

LIABILITIES + EQUITY

Accounts payable 26,000 51,000

Short-term notes payable 40,000 45,000

Income taxes payable 11,000 ?

Common stock ? 135,000

Retained earnings 213,000 253,000

The given information was taken from ABC Company's 2007 statement of cash flows:

Total cash flow from operating activities 85,000

Total cash flow from investing activities <60,000>

Total cash flow from financing activities <5,000>

Total change in cash 20,000

During 2007, ABC Company reported a cost of goods sold of $170,000, cash paid to suppliers for purchases of inventory of $118,000, and a total income of $57,000.

Determine the balance in the income taxes payable account at 31^st December, 2007.

Reference no: EM133275

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