Amounts billed to customers for services rendered Cash collected from credit customers Cash disbursements: Payment of rent Salaries paid to employees for services rendered during the year Utilities Advertising Complete this question by entering your answers in the tabs below. Required 1 In addition, you learn that the company incurred advertising costs of $21,000 in year 2, owed the advertising agency $4,600 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 2 Calculate accrual net income for both years. 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. Revenues Expenses: Rent Salaries Utilities Advertising Net income Year 2 Year 3 $310,000 $410,000 220,000 360,000 Year 2 76,000 136,000 26,000 13,000 Year 3 0 156,000 36,000 31,000
Amounts billed to customers for services rendered Cash collected from credit customers Cash disbursements: Payment of rent Salaries paid to employees for services rendered during the year Utilities Advertising Complete this question by entering your answers in the tabs below. Required 1 In addition, you learn that the company incurred advertising costs of $21,000 in year 2, owed the advertising agency $4,600 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 2 Calculate accrual net income for both years. 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. Revenues Expenses: Rent Salaries Utilities Advertising Net income Year 2 Year 3 $310,000 $410,000 220,000 360,000 Year 2 76,000 136,000 26,000 13,000 Year 3 0 156,000 36,000 31,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Hw.218.
Transcribed Image Text:Amounts billed to customers for services rendered
Cash collected from credit customers
Cash disbursements:
Payment of rent
Salaries paid to employees for services rendered during the year
Utilities
Advertising
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
In addition, you learn that the company incurred advertising costs of $21,000 in year 2, owed the advertising agency $4,600 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.
Calculate accrual net income for both years.
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.
Revenues
Expenses:
Rent
Salaries
Utilities
Advertising
Net income
Show Transcribed Text
Year 2
Required 1 Required 2
Year 2
Year 3
$310,000 $410,000
220,000
360,000
Year 3
Complete this question by entering your answers in the tabs below.
76,000
136,000
26,000
13,000
0
156,000
36,000
31,000
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
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