Required: For each transaction, determine the amount of revenue or expense, if any, that is recorded under accrual-basis accounting and under cash-basis accounting. Transaction 1. Receive cash from customers at the time of service, $2,100. 2. Issue common stock for cash, $4,400. 3. Receive cash from customers who were previously billed, $900. 4. Incur utilities cost in the current month but do not pay, $440. 5. Pay workers' salaries for the current month, $540. 6. Pay for rent one year in advance, $1,680. 7. Repay a long-term note to the bank, $1,400. 8. Pay workers' salaries for the previous period, $600. 9. Pay dividends to stockholders, $340. 10. Purchase office supplies for cash, $380. Accrual-Basis Cash-Basis Revenue Expense Revenue Expense

Required: For each transaction, determine the amount of revenue or expense, if any, that is recorded under accrual-basis accounting and under cash-basis accounting. Transaction 1. Receive cash from customers at the time of service, $2,100. 2. Issue common stock for cash, $4,400. 3. Receive cash from customers who were previously billed, $900. 4. Incur utilities cost in the current month but do not pay, $440. 5. Pay workers' salaries for the current month, $540. 6. Pay for rent one year in advance, $1,680. 7. Repay a long-term note to the bank, $1,400. 8. Pay workers' salaries for the previous period, $600. 9. Pay dividends to stockholders, $340. 10. Purchase office supplies for cash, $380. Accrual-Basis Cash-Basis Revenue Expense Revenue Expense

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter4: The Adjustment Process

Section: Chapter Questions

Problem 2PB: To demonstrate the difference between cash account activity and accrual basis profits (net income),...

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Suppose your company sells services of $180 in exchange for $110 cash and $70 on account. Required: 1. Prepare the journal entry to record this transaction. 2. Identify the amount that should be reported as net cash flow from operating activities. 3. Identify the amount that would be included in net income. 4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2).
Suppose your company sells services of $180 in exchange for $110 cash and $70 on account.Required:1. Show the journal entry to record this transaction.2. Identify the amount that should be reported as net cash flow from operating activities.3. Identify the amount that would be included in net income.4. Show how the indirect method would convert net income (requirement 3) to net cash flowfrom operating activities (requirement 2).5. What general rule about converting net income to operating cash flows is revealed by youranswer to requirement 4?
Harrigan Service Company, Inc., was incorporated by lan Harrigan and five other managers. The following activities occurred during the year: 1. Received $71,400 cash from the managers; each was issued 1,190 shares. 2. Purchased equipment for use in the business at a cost of $50,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months). 3. Signed an agreement with a cleaning service to pay it $690 per week for cleaning the corporate offices, beginning next week. 4. Ian Harrigan borrowed $19,500 for personal use from a local bank, signing a one-year note.
10 Suppose your company sells services of $310 in exchange for $175 cash and $135 on account. Required: 1. Prepare the journal entry to record this transaction. 2. Identify the amount that should be reported as net cash flow from operating activities. 3. Identify the amount that would be included in net income. 4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare the journal entry to record this transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the service revenue of $175 for cash and $135 on account. Note Enter debits before credits Transaction General Journal Debit Credit
ss. Subject :- Accounting
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Suppose your company sells services of $180 in exchange for $110 cash and $70 on account. Required: 1. Prepare the journal entry to record this transaction. 2. Identify the amount that should be reported as net cash flow from operating activities. 3. Identify the amount that would be included in net income. 4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Identify the amount that should be reported as net cash flow from operating activities. Net Cash Flow
Suppose your company sells services of $180 in exchange for $110 cash and $70 on account. Required: 1. Prepare the journal entry to record this transaction. 2. Identify the amount that should be reported as net cash flow from operating activities. 3. Identify the amount that would be included in net income. 4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2). (Amounts to be deducted should be indicated with a minus sign.) Net Income Increase in Accounts Receivable Net Cash Flow from Operating Activities