Question

The following information pertains to Ash Co., which prepares its statement of cash flows using the indirect method: Interest payable at beginning of year $15,000 Interest expense during the year 20,000 Interest payable at end of year 5,000 What amount of interest should Ash report as a supplemental disclosure of cash flow information?

Answer 1

$30,000

Step-by-step explanation:

A supplemental disclosure of cash flow information requires that all the cash paid in interest during the period must be disclosed.

In Ash's case:

beginning balance interest payable account $15,000

+ interest expense during the year $20,000

- ending balance interest payable account ($5,000)

supplemental disclosure = $30,000