Problem 3-2A (Static) Convert cash-basis accounting to accrual-basis accounting (LO3-1, 3-2) Minutemen Law Services maintains its books using cash-basis accounting. However, the company decides to borrow $100,000 from a local bank, and the bank requires Minutemen to provide annual financial statements prepared using accrual-basis accounting as part of the creditworthiness verification. During 2024, the company records the following cash flows: $70,000 Cash collected from customers Cash paid for: Salaries Supplies Rent Insurance Utilities Accounts Receivable Prepaid Insurance Supplies Salaries Payable Net cash flows You are able to determine the following information: January 1, 2024 $21,000 Expenses: $36,000 4,000 5,000 7,000 3,000 MINUTEMEN LAW SERVICES Income Statement For the Year Ended December 31, 2024 Total Expenses e 5,000 2,700 Required: Prepare an accrual-basis income statement for the year ended December 31, 2024, by calculating accrual-basis revenues and expenses. 55,000 $15,000 December 31, 2024 $24,000 3,700 2,000 4,400 0

Problem 3-2A (Static) Convert cash-basis accounting to accrual-basis accounting (LO3-1, 3-2) Minutemen Law Services maintains its books using cash-basis accounting. However, the company decides to borrow $100,000 from a local bank, and the bank requires Minutemen to provide annual financial statements prepared using accrual-basis accounting as part of the creditworthiness verification. During 2024, the company records the following cash flows: $70,000 Cash collected from customers Cash paid for: Salaries Supplies Rent Insurance Utilities Accounts Receivable Prepaid Insurance Supplies Salaries Payable Net cash flows You are able to determine the following information: January 1, 2024 $21,000 Expenses: $36,000 4,000 5,000 7,000 3,000 MINUTEMEN LAW SERVICES Income Statement For the Year Ended December 31, 2024 Total Expenses e 5,000 2,700 Required: Prepare an accrual-basis income statement for the year ended December 31, 2024, by calculating accrual-basis revenues and expenses. 55,000 $15,000 December 31, 2024 $24,000 3,700 2,000 4,400 0

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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