Use the Following Information to Calculate Cash Paid for Income

question 167

Short Answer

Use the following information to calculate cash paid for income taxes: $\begin{array}{ll}\text { Income tax expense }&\$50,000\\\text { Income tax payable, January } 1 & 9,000 \\\text { Income tax payable, December 31 } & 7,000\end{array}$
A) $\$ 57,000$ .
B) $\$ 50,000$ .
C) $\$ 59,000$ .
D) $\$ 52,000$ .
E) $\$ 48,000$ .

• A) \( \$ 57,000 \).
• B) \( \$ 50,000 \).
• C) \( \$ 59,000 \).
• D) \( \$ 52,000 \).
• E) \( \$ 48,000 \).

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Definitions:

Net Profit Margin

A profitability metric indicating the percentage of revenue left as net income after all expenses, taxes, and costs have been subtracted.

Return On Assets

Return on assets (ROA) is a profitability ratio that measures how efficiently a company can manage its assets to produce profits during a period, calculated by dividing net income by total assets.

Financial Leverage

The use of borrowed funds (debt) to amplify returns from an investment or project.

Fixed Asset Turnover Ratio

A performance metric that evaluates how efficiently a firm uses its fixed assets to generate sales.