XYZ Corporation maintains its book on a cash basis. During 2021, the company collected $950,000 in fees from its clients and paid $662,000 in expenses. You are able to determine the following information about accounts receivable, supplies, prepaid rent, deferred (unearned) revenu e, interest receivable, prepaid insurance, deferred (unearned) rent revenue, salaries payable, and interest payable: December 31, Accounts receivable Supplies Prepaid rent Deferred revenue Interest receivable Prepaid Insurance Deferred rent revenue Salaries payable Interest payable 2021 $120,000 15,000 13,000 18,000 22,000 17,000 26.000 18,000 5,000 December 31, 2020 $110,000 18,000 11,000 20.000 25,000 15,000 22,000 16,000 6,000 In addition, 2021 depreciation expense on office equipment is $10,000.
XYZ Corporation maintains its book on a cash basis. During 2021, the company collected $950,000 in fees from its clients and paid $662,000 in expenses. You are able to determine the following information about accounts receivable, supplies, prepaid rent, deferred (unearned) revenu e, interest receivable, prepaid insurance, deferred (unearned) rent revenue, salaries payable, and interest payable: December 31, Accounts receivable Supplies Prepaid rent Deferred revenue Interest receivable Prepaid Insurance Deferred rent revenue Salaries payable Interest payable 2021 $120,000 15,000 13,000 18,000 22,000 17,000 26.000 18,000 5,000 December 31, 2020 $110,000 18,000 11,000 20.000 25,000 15,000 22,000 16,000 6,000 In addition, 2021 depreciation expense on office equipment is $10,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
Transcribed Image Text:Completion Status:
2
6
7
10
11
12
QUESTION 6
XYZ Corporation maintains its book on a cash basis. During 2021, the company collected $950,000 in fees from its clients and paid $662,000
in expenses. You are able to determine the following information about accounts receivable, supplies, prepaid rent, deferred (unearned) revenu
e, interest receivable, prepaid insurance, deferred (unearned) rent revenue, salaries payable, and interest payable:
December 31,
December 31,
2021
2020
Accounts receivable
Supplies
Prepaid rent
Deferred revenue
Interest receivable
Prepaid Insurance
Deferred rent revenue
Salaries payable
Interest payable
$120,000
15,000
13,000
18,000
22,000
17,000
26.000
18,000
5,000
$110,000
18,000
11,000
20,000
25,000
15,000
22,000
16,000
6,000
In addition, 2021 depreciation expense on office equipment is $10,000.
Required: Determine accrual-basis 1.) revenue, 2.) expense
Copy the statement below and answer in the same format.
1.)
Revenue
Click Save amd Submit to save and submit. Click Save All Answers to save all answers.
Save All Answers
Close Window
Save and Submit
Transcribed Image Text:4
6.
8
10
11
12
Salaries payable
18,000
16,000
Interest payable
5,000
6,000
In addition, 2021 depreciation expense on office equipment is $10,000.
Required: Determine accrual-basis 1.) revenue, 2.) expense
Copy the statement below and answer in the same format.
1.)
Revenue
2)
Expense
TTTT Paragraph
v三,三
回i公
Arial
3 (12pt)
&D Q 5
T T
f Mashups
囲 團 田出 田 □0MT
HTHL CSS
Path: p
Words:0
Click Save and Submit to save and submit. Click Save All Answers to save all answers.
Save All Answers
Close Window
Save and Submit
Expert Solution
Step 1: Accrual basis revenue
Sales Revenue : (Accounts Receivable, Ending + Cash collection) - Accounts Receivable, Beginning
= ($120,000 + $950,000) - $110,000
= $1,070,000 - $110,000
= $960,000
Decrease in deferred revenue represents revenue recognition during 2021.
Revenue from deferred revenue: $20,000 - $18,000 = $2,000
Interest income: Nil. Because decrease in interest receivable refers to cash collection from interest receivable not the interest income.
Rental income: Nil. Because increase in deferred rent revenue refers to cash collection towards rent received in advance not the rental income.
Total revenue: $960,000 + $2,000 = $962,000
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education