3rd Edition

ISBN: 9780136912644

Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella

Publisher: Pearson Education (US)

Concept explainers

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows fro…

Balance Sheet

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the …

Financial Statements

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It…

Owner's Capital

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expect…

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Textbook Question

Chapter 2, Problem 2.8E

Cash vs. Accrual. you are provided the following information for the Del Campo Consulting Associates.

	2019	2018
Service revenue (accrual basis)	$250,000	$185,000
Cash collected from clients	80,000	97,000
Operating expenses:
Salary expense (accrual basis)	12,000	16,500
Purchased supplies for cash	4,000	2,500
Purchased supplies on account	1,500	1,000
Depreciation expense	2,000	2,000
Rent paid in cash	7,000	3,000
Prepaid insurance	5,500	-0-

Required:

Assume that all supplies purchased were used in operations in the year of purchase Rental payments pertain to rental space used in the year of payment.

a. Prepare an income statement tor Del Campo tor 2019 and 2018 under both the cash and the accrual basis of accounting.
b. Compute operating cash flow for both years under cash and accrual bases.

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Chapter 2, Problem 2.7E

Chapter 3, Problem 3.1Q

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Chapter 2 Solutions

Intermediate Accounting

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Solution Summary: The author explains that cash flow statement refers to the financial statement that shows the summary of increase or decrease in cash in a company.

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Chapter 2 Solutions