Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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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 1
East Company reported the following current assets at year end:
Cash
3,200,000.00
Acccounts Receivable
2,000,000.00
Inventory
2,800,000.00
Deferred Charges
200,000.00
8,200,000.00
The accounts receivable consisted of the following items:
Customers' accounts
1,420,000.00
Employees' accounts
240,000.00
Advances to subsidiary
260,000.00
Allowance for uncollectible accounts
(120,000.00)
Claim against shipper for goods lost in transit
200,000.00
2,000,000.00
Compute the amount to be reported as total current assets.
Exercise 6-15 (Algo) Liquid assets and accounts receivable LO A1
Barga Company's net sales for Year 1 and Year 2 are $665,000 and $749,000, respectively. Its year-end balances of accounts
receivable follow: Year 1, $64,000; and Year 2, $91,000.
a. Complete the below table to calculate the days' sales uncollected at the end of each year.
Note: Do not round intermediate calculations. Round your "Days' Sales Uncollected" answers to 1 decimal place.
Year 1:
Year 2:
Choose Numerator:
Accounts receivable
$
$
Days' Sales Uncollected
1 Choose Denominator: X
1
60,000 1
94,000 /
1
X
X
X
Days
365
365
365
=
=
=
Days' Sales Uncollected
Days' sales uncollected
31.3 days
days
Eight Question
Chapter 1 Solutions
Intermediate Accounting
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. 1.1BYPCh. 1 - Research Case 12 Accessing SEC information through...Ch. 1 - Prob. 1.3BYPCh. 1 - Prob. 1.4BYPCh. 1 - Ethics Case 18 The auditors responsibility LO14...Ch. 1 - Prob. 1.9BYPCh. 1 - Judgment Case 110 GAAP, comparability, and the...Ch. 1 - Prob. 1.11BYPCh. 1 - Prob. 1.12BYPCh. 1 - Analysis Case 113 Expense recognition LO19...Ch. 1 - Prob. 1.14BYPCh. 1 - Real World Case 115 Elements; disclosures; The...Ch. 1 - Prob. 1.16BYPCh. 1 - Target Case LO19 Target Corporation prepares its...
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