During 20B, Wilmont Company Performed Services for Which Customers Paid

question 98

Essay

During 20B, Wilmont Company performed services for which customers paid or 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.

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Definitions:

Color Vision

The ability of the visual system to distinguish objects based on the wavelengths of the light they reflect or emit.

Dark Adaptation

The method through which eyes enhance their ability to perceive dimly lit environments.

Rods

Photoreceptor cells in the retina of the eye that are sensitive to low levels of light and are primarily responsible for night vision.

Cones

Photoreceptor cells in the retina of the eye that function best in relatively bright light and enable color vision.