Homework Help is Here – Start Your Trial Now!
Business
Accounting
Do requirement 1. d, e, f

Do requirement 1. d, e, f

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Do requirement 1. d, e, f
The following data represents the summarized transactions of XYZ Trading for the year 20CY, its second year of operations. Cash sales P 750,000 Purchase return & discounts P 60,000 Sales on accounts 4,500,000 Salaries and wages paid 1,050,000 Store and office supplies paid Other operating expenses paid Collections from customers 4,300,000 300,000 Sales returns & discounts 80,000 100,000 450,000 3,000,000 2,700,000 60,000 600,000 50,000 10,000 Cash purchases Interest received Purchases on account Equipment purchased Interest paid Payment to creditors Rental collections 140,000 Accounts receivable written off Equipment was acquired at the beginning of its first year with a 10-year useful life. Additional Information at December 31, 20CY: Notes & A/c receivable, 12/31/CY Notes & A/c payable, 12/31/CY Notes & A/c receivable, 12//31/PY Notes & A/c payable, 13/31/PY Accrued salaries payable Accrued Interest payable Unused Store & office supplies Inventory, 12/31/CY Accrued Interest receivable Р 320,000 P 540,000 210,000 300,000 110,000 10,000 75,000 600,000 15,000 500,000 20,000 Inventory, 12/13/PY Unearned rent income Required: 1. Compute the following under Cash and Accrual basis of accounting: e. Interest expense f. Salaries and wages g. Store and offices supplies expense h. Depreciation expense Total gross sales Total gross purchase а. b. C. Interest Income d. Rent Income Statement of Comprehensive Income for the year ended December 31, 20CY under Cash basis of accounting. 3. Convert the Cash basis Income statement to Accrual basis of accounting. 4. Adjusting entries necessary to convert to Accrual basis. 2.
Transcribed Image Text:The following data represents the summarized transactions of XYZ Trading for the year 20CY, its second year of operations. Cash sales P 750,000 Purchase return & discounts P 60,000 Sales on accounts 4,500,000 Salaries and wages paid 1,050,000 Store and office supplies paid Other operating expenses paid Collections from customers 4,300,000 300,000 Sales returns & discounts 80,000 100,000 450,000 3,000,000 2,700,000 60,000 600,000 50,000 10,000 Cash purchases Interest received Purchases on account Equipment purchased Interest paid Payment to creditors Rental collections 140,000 Accounts receivable written off Equipment was acquired at the beginning of its first year with a 10-year useful life. Additional Information at December 31, 20CY: Notes & A/c receivable, 12/31/CY Notes & A/c payable, 12/31/CY Notes & A/c receivable, 12//31/PY Notes & A/c payable, 13/31/PY Accrued salaries payable Accrued Interest payable Unused Store & office supplies Inventory, 12/31/CY Accrued Interest receivable Р 320,000 P 540,000 210,000 300,000 110,000 10,000 75,000 600,000 15,000 500,000 20,000 Inventory, 12/13/PY Unearned rent income Required: 1. Compute the following under Cash and Accrual basis of accounting: e. Interest expense f. Salaries and wages g. Store and offices supplies expense h. Depreciation expense Total gross sales Total gross purchase а. b. C. Interest Income d. Rent Income Statement of Comprehensive Income for the year ended December 31, 20CY under Cash basis of accounting. 3. Convert the Cash basis Income statement to Accrual basis of accounting. 4. Adjusting entries necessary to convert to Accrual basis. 2.
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question

How do you calculate the first years net income under the cash basis of accoun

In its first year of operations, Patricia Corp. earned $48,100 in service revenue. Of that amount, $7,600 was on account and the remainder, $40,500, was collected in cash from customers. The company incurred various expenses totalling $32,100, of which $28,600 was paid in cash. At year end, $3,500 was still owing on account. In addition, Patricia prepaid $2,000 for insurance coverage that covered the last half of the first year and the first half of the second year. Patricia expects to owe $3,000 of income tax when it files its corporate income tax return after year end. (a) Your Answer Correct Answer (Used) Calculate the first year's net income under the accrual basis of accounting. Net income under accrual basis $ 12.000 (b) Calculate the first year's net income under the cash basis of accounting. Net income under cash basis ta 2
Transcribed Image Text:In its first year of operations, Patricia Corp. earned $48,100 in service revenue. Of that amount, $7,600 was on account and the remainder, $40,500, was collected in cash from customers. The company incurred various expenses totalling $32,100, of which $28,600 was paid in cash. At year end, $3,500 was still owing on account. In addition, Patricia prepaid $2,000 for insurance coverage that covered the last half of the first year and the first half of the second year. Patricia expects to owe $3,000 of income tax when it files its corporate income tax return after year end. (a) Your Answer Correct Answer (Used) Calculate the first year's net income under the accrual basis of accounting. Net income under accrual basis $ 12.000 (b) Calculate the first year's net income under the cash basis of accounting. Net income under cash basis ta 2
Solution
Bartleby Expert
SEE SOLUTION
Knowledge Booster
Financial Information
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS