Accrual basis accounting: According to this basis of accounting, revenue should be recognized at the time when it is earned, irrespective of whether the cash received or not, and expense should be recognized at the time when it is incurred, irrespective of whether it is paid or not. To Determine: The accrual net income for the year 2018.

Question

Want to see the full answer?

Answer 1

Question

Chapter 2, Problem 2.13BE

To determine

Accrual basis accounting:

According to this basis of accounting, revenue should be recognized at the time when it is earned, irrespective of whether the cash received or not, and expense should be recognized at the time when it is incurred, irrespective of whether it is paid or not.

To Determine: The accrual net income for the year 2018.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

310 Chapter 9 Statement of Financial Position Presentation: Cash and Other Related Items 9-15. Genius Company is preparing its 2016 financial statements; the accounting period ends December 31. The following items, related to cash, are under consideration. You have been asked to indicate how each item should be reported on the statement of financial position and to explain the basis for your responses. a. A P900 check received from a customer, dated February 1, 2017, is on hand. b. A customer's check was included in the December 20 deposit. It was returned by the bank stamped NSF. No entry has yet been made by Genius to reflect the return. c. A P20,000 note receivable on which P1,000 of interest accrued to December 31 has just been recorded by debiting interest receivable and crediting interest revenue. The chief accountant proposes to report the P20,000 as cash in bank. d. Genius has a P200 petty cash fund. As of December 31, the fund cashier reported expense vouchers covering various…

Problem 1.5: Anne Corporation accounts for its sales under the cash basis. Anne Corporation cash receipts books amounted to P 1,400,000. Total collections from customers, including cash sales made and recoveries of previously written-off accounts. Based on Audit investigation, they revealed that the additional information are the following: Accounts receivable, January 1, 2021 Accounts receivable, December 31, 2021 Notes receivable, trade outstanding, January 1, 2021 Notes receivable, trade outstanding, December 31, 2021 Sales discount taken by customers Sales returns before collections were made (Evidenced by issued credit memos) Sales returns after collections were made, thus refunds were given Write-off worthless accounts receivable Cash recoveries from accounts previously write-off 100,000 140,000 80,000 90,000 40,000 25,000 5,000 30,000 10,000 Requirements: Compute for the following under the accrual basis of accounting: a. Gross sales for the year b. Net sales for the year c.…

D Question 6 An entity reported the following data on December 31,2019: Cash in bank, net of bank overdraft of 100,000 1200,000 PCF, including unreplenished expenses of 10,000 50,000 Notes receivables 750,000 A/R net customers account with credit balances of 200K 2,000,000 Inventory, excluding unrecorded purchase of 300,000 on account in transit shipped FOB SP on 12/31/19 2500,000