Wayne Rogers Corp. maintains its financial records on the cash basis of accounting. Interested in securing a long-term loan from its regular bank, Wayne Rogers Corp. requests you as its independent CPA to convert its cash-basis income statement data to the accrual basis. You are provided with the following summarized data covering 2019, 2020, and 2021. 2019 2020 2021Cash receipts from sales: On 2019 sales$295,000 $160,000 $ 30,000 On 2020 sales–0– 355,000 90,000 On 2021 sales 408,000Cash payments for expenses: On 2019 expenses185,000 67,000 25,000 On 2020 expenses40,000a160,000 55,000 On 2021 expenses 45,000b218,000a Prepayments of 2020 expenses.b Prepayments of 2021 expenses.Instructionsa. Using the data above, prepare abbreviated income statements for the years 2019 and 2020 on the cash basis.b. Using the data above, prepare abbreviated income statements for the years 2019 and 2020 on the accrual basis.

Name: Wayne Rogers Corp. maintains its financial records on the cash basis o
Uploaded: 2024-03-04T10:43:15.000Z
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Description: Wayne Rogers Corp. maintains its financial records on the cash basis of accounting. Interested in securing a long-term loan from its regular bank, Wayne Rogers Corp. requests you as its independent CPA to convert its cash-basis income statement data

Calculation of sales revenue for year 2019 and 2020: Formulation as below:

Answered: Wayne Rogers Corp. maintains its…

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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		2019
Cash receipts from sales:
On 2019 sales	$295,000	$160,000	$ 30,000
On 2020 sales	–0–	355,000	90,000
On 2021 sales			408,000
Cash payments for expenses:
On 2019 expenses	185,000	67,000	25,000
On 2020 expenses	40,000^a	160,000	55,000
On 2021 expenses		45,000^b	218,000
^a Prepayments of 2020 expenses.
^b Prepayments of 2021 expenses.

Instructions

a. Using the data above, prepare abbreviated income statements for the years 2019 and 2020 on the cash basis.

b. Using the data above, prepare abbreviated income statements for the years 2019 and 2020 on the accrual basis.

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