Horizon Retail made $250,000 in sales to customers, of which $180,000 was collected in cash. The company incurred $90,000 in expenses, of which $50,000 was paid in cash. (A) Calculate the Accrual Basis Net Income and Cash Basis Net Income. (B) Determine the Return on Sales Ratio for each method.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter6: Merchandising Transactions
Section: Chapter Questions
Problem 22Q: The following is select account information for August Sundries. Sales: $850,360; Sales Returns and...
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Horizon Retail made $250,000 in sales to customers, of
which $180,000 was collected in cash. The company
incurred $90,000 in expenses, of which $50,000 was paid
in cash.
(A) Calculate the Accrual Basis Net Income and Cash Basis
Net Income.
(B) Determine the Return on Sales Ratio for each method.
Transcribed Image Text:Horizon Retail made $250,000 in sales to customers, of which $180,000 was collected in cash. The company incurred $90,000 in expenses, of which $50,000 was paid in cash. (A) Calculate the Accrual Basis Net Income and Cash Basis Net Income. (B) Determine the Return on Sales Ratio for each method.
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