Select Transactions of Irene Accounting Inc

question 56

Essay

Select transactions of Irene Accounting Inc.(IAI)are listed below.IAI uses the indirect method to determine cash flows from operating activities.
1.IAI sells a held-to-maturity investment for $28,000.The investment's amortized cost is $20,000.
2.IAI's income tax expense totaled $30,000.Its income tax payable account increased $5,000,while its deferred income tax liability account decreased $18,000.
3.IAI declares a cash dividend of $3,000.The dividends payable account increases $1,000.
4.At year-end IAI increases its allowance for bad debts by $15,000.
Required:
Discuss how the activities listed above would be reported in the statement of cash flows.For items with multiple reporting options,identify all available options.For items not reported on the statement of cash flows,indicate the disclosure requirements,if any.

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Definitions:

Basic Economic Questions

Fundamental questions every economy must answer regarding what to produce, how to produce it, and for whom it is produced.

Economic Growth

An increase in the amount of goods and services produced per head of the population over a period of time, reflecting a growing economy.

Outward Shift

In economics, refers to the movement of a curve away from the origin on a graph, typically illustrating growth or increase in factors like production possibility frontier or supply curve.

Technology

The application of scientific knowledge for practical purposes, especially in industry and the development of new products or processes.