Solution-Show how cash flows from rent received affect

Show how cash flows from rent received affect taxable income

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Reference no: EM133133061

Question - Newcastle Ltd has the following accounts in the income statement and the statement of financial position:

	2020	2019
Income statement	$	$
Rent revenue	8 000
Bad debt expense	30 000
Insurance expense	11 000
Assets
Account receivable	500 000	400 000
Allowance for doubtful debts	(20 000)	(25 000)
Repaid insurance	10 000	8 000
Liability
Rent received in advance	2 000	3 000

Required - Show how cash flows from rent received affect the taxable income calculation.

(a) Deduct rent received $7,000.

(b) Deduct rent received $9,000.

(d) Add rent received $9,000.

Reference no: EM133133061

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Show how cash flows from rent received affect taxable income

Reference no: EM133133061

Reference no: EM133133061

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