Question

The income statement of Dolan Corporation for 2014 included the following items: Interest revenue $ 121,000 Salaries and wages expense 180,000 Insurance expense 18,200 The following balances (all normal balances) have been excerpted from Thompson Corporation's balance sheets: December 31, 2014 December 31, 2013 Interest receivable $ 18,200 $ 15,000 Salaries and wages payable 17,800 8,400 Prepaid insurance 2,200 3,000 The cash paid for salaries and wages during 2014 was

Answer 1

$170,600

Step-by-step explanation:

The fact that salaries and wages payable increased in 2014 is a pointer to the fact that the salaries and wages expense incurred in 2014 was not fully settled in cash as the increase in salaries and wages payable represent the 2014 expense still owed.

The cash paid for salaries and wages during 2014=salaries and wages expense-increase in salary and wages payable

salaries and wages expense=$180,000

increase in salary and wages payable=$17,800-$8,400=$9,400

The cash paid for salaries and wages during 2014=$180,000-$9,400

The cash paid for salaries and wages during 2014=$170,600