6. Listed below are several transactions that took place during the second and third years of operations for the RPG Company. Year 2 Year 3 Amounts billed to customers for services rendered $ 340,000 $ 440,000 Cash collected from credit customers 250,000 390,000 Cash disbursements: Payment of rent 79,000 0 Salaries paid to employees for services rendered during the year 139,000 159,000 Utilities 29,000 39,000 Advertising 14,500 34,000 In addition, you learn that the company incurred advertising costs of $24,000 in year 2, owed the advertising agency $4,900 at the end of year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated bad debts on receivables, and the rent payment was for a two-year period, year 2 and year 3. Required: 1. Calculate accrual net income for both years. 2. Determine the amount due the advertising agency that would be shown as a liability on RPG’s balance sheet at the end of year 2.
6. Listed below are several transactions that took place during the second and third years of operations for the RPG Company. Year 2 Year 3 Amounts billed to customers for services rendered $ 340,000 $ 440,000 Cash collected from credit customers 250,000 390,000 Cash disbursements: Payment of rent 79,000 0 Salaries paid to employees for services rendered during the year 139,000 159,000 Utilities 29,000 39,000 Advertising 14,500 34,000 In addition, you learn that the company incurred advertising costs of $24,000 in year 2, owed the advertising agency $4,900 at the end of year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated bad debts on receivables, and the rent payment was for a two-year period, year 2 and year 3. Required: 1. Calculate accrual net income for both years. 2. Determine the amount due the advertising agency that would be shown as a liability on RPG’s balance sheet at the end of year 2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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6. Listed below are several transactions that took place during the second and third years of operations for the RPG Company.
| Year 2 | Year 3 | |||||
| Amounts billed to customers for services rendered | $ | 340,000 | $ | 440,000 | ||
| Cash collected from credit customers | 250,000 | 390,000 | ||||
| Cash disbursements: | ||||||
| Payment of rent | 79,000 | 0 | ||||
| Salaries paid to employees for services rendered during the year | 139,000 | 159,000 | ||||
| Utilities | 29,000 | 39,000 | ||||
| Advertising | 14,500 | 34,000 | ||||
In addition, you learn that the company incurred advertising costs of $24,000 in year 2, owed the advertising agency $4,900 at the end of year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated
Required:
1. Calculate accrual net income for both years.
2. Determine the amount due the advertising agency that would be shown as a liability on RPG’s balance sheet at the end of year 2.
Transcribed Image Text:Required:
1. Calculate accrual net income for both years.
2. Determine the amount due the advertising agency that would be shown as a liability on RPG's balance sheet at the end of year 2.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Calculate accrual net income for both years.
Year 2
Year 3
Revenues
Expenses:
Rent
Salaries
Utilities
Advertising
Net income
< Required 1
Required 2 >
Transcribed Image Text:Required:
1. Calculate accrual net income for both years.
2. Determine the amount due the advertising agency that would be shown as a liability on RPG's balance sheet at the end of year 2.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Determine the amount due the advertising agency that would be shown as a liability on RPG's balance sheet at the end of
year 2.
Advertising liability at end of Year 2
< Required 1
Required 2 >
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