Claymore Corporation maintains its book on a cash basis. During 2016, the company collected $825,000 in fees from its clients and paid $512,000 in expenses. You are able to determine the following information about accounts receivable, supplies, prepaid rent, salaries payable, and interest payable: January 1, 2016 December 31, 2016 Accounts receivable $110,000 $120,000 Supplies 15,000 18,000 Prepaid rent 12,000 11,000 Salaries and wages payable 16,500 14,200 Interest payable 4,000 5,500 In addition, 2016 depreciation expense on office equipment and furniture is $55,000. Required: Determine accrual basis income for 2016. Cash basis net income ($825,000 – 512,000) Add: Increase in accounts receivable Increase in supplies Decrease in salaries and wages payable Deduct: Depreciation expense Decrease in prepaid rent Increase in interest payable Accrual basis income
Claymore Corporation maintains its book on a cash basis. During 2016, the company collected $825,000 in fees from its clients and paid $512,000 in expenses. You are able to determine the following information about
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|
January 1, 2016 |
December 31, 2016 |
|
Accounts receivable |
$110,000 |
$120,000 |
|
Supplies |
15,000 |
18,000 |
|
Prepaid rent |
12,000 |
11,000 |
|
Salaries and wages payable |
16,500 |
14,200 |
|
Interest payable |
4,000 |
5,500 |
In addition, 2016
Required: Determine accrual basis income for 2016.
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Cash basis net income ($825,000 – 512,000) |
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Add: |
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Increase in accounts receivable |
|
|
Increase in supplies |
|
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Decrease in salaries and wages payable |
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|
Deduct: |
|
|
Depreciation expense |
|
|
Decrease in prepaid rent |
|
|
Increase in interest payable |
|
|
Accrual basis income |
|
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