Based on the information shown below, calculate for the year ended December 31, 2021, (a) the total amount of expenditures that would be recognized when using the current financial resources measurement focus and modified accrual basis of accounting, and (b) the total amount of expenses that would be recognized using the economic resources measurement focus and accrual basis of accounting. Salaries paid in cash during 2021 $6,000,000 Salaries applicable to 2021, due to be paid January 5, 2022 40,000 Utility bill applicable to 2021, due to be paid January 10, 2022 20,000 Equipment acquired at the beginning of 2021 and having an estimated useful life of 10 years 400,000 Payment of principal on long-term debt on December 31, 2021 200,000 Payment of interest on long-term debt on December 31, 2021 80,000
Based on the information shown below, calculate for the year ended December 31, 2021, (a) the total amount of expenditures that would be recognized when using the current financial resources measurement focus and modified accrual basis of accounting, and (b) the total amount of expenses that would be recognized using the economic resources measurement focus and accrual basis of accounting. Salaries paid in cash during 2021 $6,000,000 Salaries applicable to 2021, due to be paid January 5, 2022 40,000 Utility bill applicable to 2021, due to be paid January 10, 2022 20,000 Equipment acquired at the beginning of 2021 and having an estimated useful life of 10 years 400,000 Payment of principal on long-term debt on December 31, 2021 200,000 Payment of interest on long-term debt on December 31, 2021 80,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Based on the information shown below, calculate for the year ended December 31, 2021,
(a) the total amount of expenditures that would be recognized when using the current
financial resources measurement focus and modified accrual basis of accounting, and
(b) the total amount of expenses that would be recognized using the economic resources
measurement focus and accrual basis of accounting.
| Salaries paid in cash during 2021 | $6,000,000 |
| Salaries applicable to 2021, due to be paid January 5, 2022 | 40,000 |
| Utility bill applicable to 2021, due to be paid January 10, 2022 | 20,000 |
| Equipment acquired at the beginning of 2021 and having an estimated useful life of 10 years | 400,000 |
| Payment of principal on long-term debt on December 31, 2021 | 200,000 |
| Payment of interest on long-term debt on December 31, 2021 | 80,000 |
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