Question

Hackett, Inc. had property tax payable of $940,000 and $100,000 at the end of 2018 and 2019 respectively. During 2019, Hackett recorded $790,000 in property tax expense on its income statement. Cash outflows for property tax during 2019 were ________.

Answer 1

Answer:

The cash outflow against property tax is $ 1,630,000

Explanation:

The cash outflow against property tax payment in 2019 can be calculated as a balancing figure as follows:

Opening Property tax payable Jan 2019            $ 940,000 (a)

add: New tax charged during 2019                     $ 790,000 (b)

less: Tax paid during 2019 (Balancing figure)     $ 1,630,000 (d)

Closing balance Dec 2019                                     $ 100,000   (c)

Formula: a+b-c =d