Explain How the Following Transactions Should Be Reported in the Statement

question 57

Essay

Explain how the following transactions should be reported in the statement of cash flows, assuming the indirect method is used to determine cash flows from operating activities. Identify all available options. If not reported on the statement of cash flows, indicate the disclosure requirements, if any.
1. Income tax expense of $30,000. The income tax payable account increased $7,000, while the deferred income tax liability account decreased $9,000.
2. Cash dividend of $40,000 declared. The dividends payable account increases $25,000.

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Definitions:

Sampling Distribution

A statistical distribution that represents the frequency of various outcomes in a set of samples drawn from a larger population.

Standard Deviation

A measurement of the dispersion or variation of a set of values, indicating how much the values deviate from the mean of the set.

Sampling Distribution

The pattern of likelihood for a particular statistic that originates from a random sample.

Standard Deviation

An indicator of the degree of spread or variability among a collection of figures, showing how far the values diverge from the average.