Do requirement 1. d, e, f

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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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
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