Ellie and linda are equal owners in otter enterprises, a calendar year business. during the current year, otter enterprises has $320,000 of gross income and $210,000 of operating expenses. in addition, otter has a long-term capital gain of $15,000 and makes distributions to ellie and linda of $25,000 each. what is the impact of this information on the taxable income of otter, ellie, and linda?

For each separate case below, follow the 3-step process for adjusting the prepaid asset account at december 31. step 1: determine what the current account balance equals. step 2: determine what the current account balance should equal. step 3: record the december 31 adjusting entry to get from step 1 to step 2. assume no other adjusting entries are made during the year. a. prepaid insurance. the prepaid insurance account has a $4,700 debit balance to start the year. a re- view of insurance policies and payments shows that $900 of unexpired insurance remains at year-end. b. prepaid insurance. the prepaid insurance account has a $5,890 debit balance at the start of the year. a review of insurance policies and payments shows $1,040 of insurance has expired by year-end. c. prepaidrent. onseptember1ofthecurrentyear, thecompanyprepaid$24,000 for 2 years of rentfor facilities being occupied that day. the company debited prepaid rent and credited cash for $24,000.

Cash flow is often a problem for small businesses. how can an entrepreneur increase cash flow? a) locate lower-priced suppliers. b) forego sending in estimated tax payments to the irs c) shorten the terms on a bank loan to pay it off more quickly d) sell more low-margin items.

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