Schneider Inc. had salaries payable of $60,000 and $90,000 at the end of Year1 and Year2, respectively. During Year2, Schneider recorded $620,000 in salaries expense in its income statement. Cash outflows for salaries in Year2 were:

a.

$590,000.

b.

$620,000.

c.

$650,000.

d.

$530,000.

Question

Business

Edgar Campbell

9 December, 02:11

Schneider Inc. had salaries payable of $60,000 and $90,000 at the end of Year1 and Year2, respectively. During Year2, Schneider recorded $620,000 in salaries expense in its income statement. Cash outflows for salaries in Year2 were:

a.

$590,000.

b.

$620,000.

c.

$650,000.

d.

$530,000.

+4

Answers (1)

Know the Answer?

Damon Wolf · Answer 1

The correct answer is option (A).

Explanation:

According to the scenario, the given data are as follows:

Salaries payable at the end of year 1 = $60,000

Salaries payable at the end of year 2 = $90,000

Salary expense in year 2 = $620,000

So, we can calculate the cash outflows for salaries in year 2 by using following formula:

Cash outflow = Salary recorded in year 2 + Salaries payable at the beginning of the year - Salaries payable at the end of year

= $620,000 + $60,000 - $90,000

= $590,000

Hence, the cash outflow for salaries in year 2 is $590,000.

Schneider Inc. had salaries payable of $60,000 and $90,000 at the end of Year1 and Year2, respectively. During Year2, Schneider recorded $620,000 in salaries expense in its income statement. Cash outflows for salaries in Year2 were:a.$590,000.b.$620,000.c.$650,000.d.$530,000.

Schneider Inc. had salaries payable of $60,000 and $90,000 at the end of Year1 and Year2, respectively. During Year2, Schneider recorded $620,000 in salaries expense in its income statement. Cash outflows for salaries in Year2 were:

a.

$590,000.

b.

$620,000.

c.

$650,000.

d.

$530,000.