Exercise 1-2 (Algo) Accrual accounting [LO1-2]Listed below are several transactions that took place during the second and third years of operations for the RPG Company.Year 2 Year 3$280,000 $380,000190,000 330,000Amounts billed to customers for services renderedCash collected from credit customersCash disbursements:Payment of rentSalaries paid to employees for services rendered during the yearUtilitiesAdvertising73,000133,00023,00011,5000153,00033,00028,000In addition, you learn that the company incurred advertising costs of $18,000 in year 2, owed the advertising agency $4,300 at the endof year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated bad debts on receivables, and the rentpayment was for a two-year period, year 2 and year 3.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.

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Description: Exercise 1-2 (Algo) Accrual accounting [LO1-2]Listed below are several transactions that took place during the second and third years of operations for the RPG Company.Year 2 Year 3$280,000 $380,000190,000 330,000Amounts billed to customers for serv

The accrual basis accounting records the revenue and expenses as and when they are actually…

Business

Accounting

Exercise 1-2 (Algo) isted below are several transactions that took place during the second and third years of operations for the RPG Company. Year 2 Year 3 $280,000 $380,000 190,000 330,000 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 73,000 133,000 23,000 11,500 0 153,000 33,000 28,000 addition, you learn that the company incurred advertising costs of $18,000 in year 2, owed the advertising agency $4,300 at the end f 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 ayment was for a two-year period, year 2 and year 3. equired: Calculate accrual net income for both years. . 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.

Exercise 1-2 (Algo) isted below are several transactions that took place during the second and third years of operations for the RPG Company. Year 2 Year 3 $280,000 $380,000 190,000 330,000 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 73,000 133,000 23,000 11,500 0 153,000 33,000 28,000 addition, you learn that the company incurred advertising costs of $18,000 in year 2, owed the advertising agency $4,300 at the end f 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 ayment was for a two-year period, year 2 and year 3. equired: Calculate accrual net income for both years. . 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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