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

Answer:

$30,000

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