Novak Corp uses the direct method to prepare its statement o

Novak Corp. uses the direct method to prepare its statement of cash flows. Novak trial balances at December 31, 2017 and 2016, are as follows.

December 31

2017

2016

$35,000

$32,400

33,200

29,800

31,000

47,200

100,400

95,400

4,600

5,100

248,100

376,800

141,100

173,700

136,600

152,000

4,300

2,700

20,500

61,000

$754,800

$976,100

$1,300

$1,100

16,600

15,100

25,200

15,600

20,900

29,100

5,200

4,500

44,800

20,000

49,500

40,000

9,100

7,500

44,600

65,200

537,600

778,000

$754,800

$976,100

Additional information:

Determine what amounts Novak should report in its statement of cash flows for the year ended December 31, 2017, for the following items.

I need help solving for Cash Paid for Income Taxes and Cash paid for selling expenses........

		December 31
Debits		2017		2016
Cash		$35,000		$32,400
Accounts receivable		33,200		29,800
Inventory		31,000		47,200
Property, plant, & equipment		100,400		95,400
Unamortized bond discount		4,600		5,100
Cost of goods sold		248,100		376,800
Selling expenses		141,100		173,700
General and administrative expenses		136,600		152,000
Interest expense		4,300		2,700
Income tax expense		20,500		61,000
		$754,800		$976,100
Credits
Allowance for doubtful accounts		$1,300		$1,100
Accumulated depreciation—plant assets		16,600		15,100
Accounts payable		25,200		15,600
Income taxes payable		20,900		29,100
Deferred tax liability		5,200		4,500
8% callable bonds payable		44,800		20,000
Common stock		49,500		40,000
Paid-in capital in excess of par		9,100		7,500
Retained earnings		44,600		65,200
Sales revenue		537,600		778,000
		$754,800		$976,100

Solution

Cash Paid for Income Taxes

Opening provision of Income tax

$    29,100.00

Current year\'s Income tax

$    20,500.00

Less: Closing provision of Income tax

$    20,900.00

Cash paid for Income taxes

$    28,700.00

Cash paid for selling Expenses

Total selling expenses

$ 141,100.00

Less: 1/3 Depreciation (non cash expense)

$          500.00

Cash paid for selling Expenses

$ 140,600.00

Selling expenses Includes 1/3 of Depreciation. Since Depreciation is a non cash expenses it has to be deducted from total selling expense to get cash selling expense.

Calculation of Depreciation

Closing balance of Accumulated depreciation

$    16,600.00

Less: Opening balance of Accumulated depreciation

$    15,100.00

Depreciation for the Year (balancing Figure)

$      1,500.00

Cash Paid for Income Taxes
Opening provision of Income tax	$    29,100.00
Current year\'s Income tax	$    20,500.00
Less: Closing provision of Income tax	$    20,900.00
Cash paid for Income taxes	$    28,700.00