INTERMEDIATE ACCOUNTING <CUSTOM LL>
10th Edition
ISBN: 9781260887068
Author: SPICELAND
Publisher: MCG CUSTOM
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Chapter 1, Problem 1.2E
Accrual accounting
• LO1–2
Listed below are several transactions that took place during the second and third years of operations for the RPG Company.
| Year 2 | Year 3 | |
| Amounts billed to customers for services rendered | $350,000 | $450,000 |
| Cash collected from credit customers | 260,000 | 400,000 |
| Cash disbursements: | ||
| Payment of rent | 80,000 | –0– |
| Salaries paid to employees for services rendered during the year | 140,000 | 160,000 |
| Travel and entertainment | 30,000 | 40,000 |
| Advertising | 15,000 | 35,000 |
In addition, you learn that the company incurred advertising costs of $25,000 in year 2, owed the advertising agency $5,000 at the end of year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated
Required:
1. Calculate accrual net income for both years.
2. Determine the amount due the advertising agency that would be shown as a liability on RPG’s
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Problem 10-01A
On January 1, 2022, the ledger of Cullumber Company contained these liability accounts.
Accounts Payable
$45,000
Sales Taxes Payable
9,100
Unearned Service Revenue
21,500
During January, the following selected transactions occurred.
Jan. 1
Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note.
5
Sold merchandise for cash totaling $5,936, which includes 6% sales taxes.
12
Performed services for customers who had made advance payments of $12,500. (Credit Service Revenue.)
14
Paid state treasurer’s department for sales taxes collected in December 2021, $9,100.
20
Sold 750 units of a new product on credit at $54 per unit, plus 6% sales tax.
During January, the company’s employees earned wages of $52,000. Withholdings related to these wages were $3,978 for Social Security (FICA), $5,686 for federal income tax, and $1,706 for state income tax. The company owed no money related to these earnings for federal or state…
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CHP#10_3
Journal Entries for Accounts and Notes PayableGeary Company had the following transactions:
Apr.
15
Issued a $6,000, 60-day, 8 percent note payable in payment of an account with Marion Company.
May
22
Borrowed $50,000 from Sinclair Bank, signing a 60-day note at nine percent.
Jun.
14
Paid Marion Company the principal and interest due on the April 15 note payable.
Jul.
13
Purchased $15,000 of merchandise from Sharp Company; signed a 90-day note with eight percent interest.
Jul.
21
Paid the May 22 note due Sinclair Bank.
Oct.
2
Borrowed $38,000 from Sinclair Bank, signing a 120-day note at 12 percent.
Oct.
11
Defaulted on the note payable to Sharp Company.
Requireda. Record these transactions in general journal form.b. Record any adjusting entries for interest in general journal form. Geary Company has a December 31 year-end.
Round answers to nearest dollar. Use 360 days for interest calculations.
Chapter 1 Solutions
INTERMEDIATE ACCOUNTING <CUSTOM LL>
Ch. 1 - Prob. 1.1QCh. 1 - What is meant by the phrase efficient allocation...Ch. 1 - Identify two important variables to be considered...Ch. 1 - What must a company do in the long run to be able...Ch. 1 - Prob. 1.5QCh. 1 - Prob. 1.6QCh. 1 - Prob. 1.7QCh. 1 - Prob. 1.8QCh. 1 - Prob. 1.9QCh. 1 - Prob. 1.10Q
Ch. 1 - Prob. 1.11QCh. 1 - Prob. 1.12QCh. 1 - Prob. 1.13QCh. 1 - Prob. 1.14QCh. 1 - Prob. 1.15QCh. 1 - Explain what is meant by: The benefits of...Ch. 1 - Prob. 1.17QCh. 1 - Briefly define the financial accounting elements:...Ch. 1 - Prob. 1.19QCh. 1 - What is the going concern assumption?Ch. 1 - Prob. 1.21QCh. 1 - Prob. 1.22QCh. 1 - What are two advantages to basing the valuation of...Ch. 1 - Describe how revenue recognition relates to...Ch. 1 - What are the four different approaches to...Ch. 1 - In addition to the financial statement elements...Ch. 1 - Briefly describe the inputs that companies should...Ch. 1 - Prob. 1.28QCh. 1 - Prob. 1.29QCh. 1 - Prob. 1.30QCh. 1 - Prob. 1.31QCh. 1 - Prob. 1.32QCh. 1 - Accrual accounting LO12 Cash flows during the...Ch. 1 - Financial statement elements LO17 For each of the...Ch. 1 - Prob. 1.3BECh. 1 - Basic assumptions and principles LO17 through...Ch. 1 - Prob. 1.5BECh. 1 - Prob. 1.6BECh. 1 - Accrual accounting LO12 Listed below are several...Ch. 1 - Accrual accounting LO12 Listed below are several...Ch. 1 - Prob. 1.3ECh. 1 - Prob. 1.4ECh. 1 - Prob. 1.5ECh. 1 - Financial statement elements LO17 For each of the...Ch. 1 - Concepts; terminology; conceptual framework LO17...Ch. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10ECh. 1 - Basic assumptions and principles LO18, LO19...Ch. 1 - Prob. 1.12ECh. 1 - Prob. 1.13ECh. 1 - Prob. 1.14ECh. 1 - Prob. 1.15ECh. 1 - Prob. 1.1DMPCh. 1 - Research Case 12 Accessing SEC information through...Ch. 1 - Prob. 1.7DMPCh. 1 - Prob. 1.8DMPCh. 1 - Prob. 1.9DMPCh. 1 - Prob. 1.10DMPCh. 1 - Real World Case 115 Elements; disclosures; The...Ch. 1 - Prob. 1.12DMPCh. 1 - Target Case LO19 Target Corporation prepares its...
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