GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 3, Problem 3.2ME
Reporting Cash Basis versus Accrual Basis Income
Skidmore Music Company had the following transactions in March:
- a. Sold instruments to customers for $18,000 received $8,000 in cash and the rest on account. The cost of the instruments was $9,000.
- b. Purchased $4,000 of new instruments inventory; paid $1,000 in cash and owed the rest on account.
- c. Paid $900 in wages to employees who worked during the month.
- d. Received $5,000 from customers as deposits on orders of new instruments to be sold to the customers in April.
- e. Received a $300 bill for March utilities that will be paid in April.
Complete the following statements:
| Cash Basis Income Statement | Accrual Basis Income Statement |
| Revenues | Revenues |
| Cash sales | Sales to customers |
| Customer deposits | |
| Expenses | Expenses |
| Inventory purchases | Cost of sales |
| Wages paid | Wages expense |
| Utilities expense | |
| Net income | Net income |
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
What are the gross sales for the month of December on these accounting question?
1. During December, A Company started doing business and had gross credit trade sales of $800,000,
terms 2/10 Net 30. The cost of goods sold of $480,000, selling general administration costs of $100,000,
Interest Expense of $10,000; and an income tax rate of 30%.
a. Prepare an income statement
b. Prepare journal entries Assuming gross method and all payments for the trade sales were made
within 10 days.
Vai
Chapter 3 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 3 - Prob. 1QCh. 3 - Prob. 2QCh. 3 - Write the income statement equation and define...Ch. 3 - Explain the difference between a. Revenues and...Ch. 3 - Define accrual accounting and contrast it with...Ch. 3 - Prob. 6QCh. 3 - Explain the expense recognition principle.Ch. 3 - Explain why stockholders equity is increased by...Ch. 3 - Explain why revenues are recorded as credits and...Ch. 3 - Complete the following matrix by entering either...
Ch. 3 - Complete the following matrix by entering either...Ch. 3 - Prob. 12QCh. 3 - State the equation for the net profit margin ratio...Ch. 3 - Which of the following is not a specific account...Ch. 3 - Which of the following is not one of the criteria...Ch. 3 - The expense recognition principle controls a....Ch. 3 - Prob. 4MCQCh. 3 - Prob. 5MCQCh. 3 - Prob. 6MCQCh. 3 - Prob. 7MCQCh. 3 - Prob. 8MCQCh. 3 - Prob. 9MCQCh. 3 - Prob. 10MCQCh. 3 - Prob. 3.1MECh. 3 - Reporting Cash Basis versus Accrual Basis Income...Ch. 3 - Identifying Revenues The following transactions...Ch. 3 - Identifying Expenses The following transactions...Ch. 3 - Prob. 3.5MECh. 3 - Prob. 3.6MECh. 3 - Determining the Financial Statement Effects of...Ch. 3 - Prob. 3.8MECh. 3 - Prob. 3.9MECh. 3 - Identifying the Operating Activities in a...Ch. 3 - Prob. 3.11MECh. 3 - Prob. 3.1ECh. 3 - Reporting Cash Basis versus Accrual Basis Income...Ch. 3 - Identifying Revenues Revenues are normally...Ch. 3 - Identifying Expenses Revenues are normally...Ch. 3 - Prob. 3.5ECh. 3 - Determining Financial Statement Effects of Various...Ch. 3 - Recording Journal Entries Sysco, formed in 1969,...Ch. 3 - Prob. 3.8ECh. 3 - Prob. 3.9ECh. 3 - Analyzing the Effects of Transactions in...Ch. 3 - Preparing an Income Statement Refer to E3-10....Ch. 3 - Prob. 3.12ECh. 3 - Analyzing the Effects of Transactions in...Ch. 3 - Prob. 3.14ECh. 3 - Prob. 3.15ECh. 3 - Prob. 3.16ECh. 3 - Prob. 3.17ECh. 3 - Prob. 3.18ECh. 3 - Prob. 3.19ECh. 3 - Prob. 3.20ECh. 3 - Prob. 3.1PCh. 3 - Recording Journal Entries (AP3-2) Ryan Terlecki...Ch. 3 - Prob. 3.3PCh. 3 - Prob. 3.4PCh. 3 - Prob. 3.5PCh. 3 - Prob. 3.6PCh. 3 - Prob. 3.7PCh. 3 - Recording Nonquantitative Journal Entries (P3-1)...Ch. 3 - Prob. 3.2APCh. 3 - Prob. 3.3APCh. 3 - Prob. 3.4APCh. 3 - Prob. 3.5APCh. 3 - Prob. 3.6APCh. 3 - Accounting for Operating Activities in a New...Ch. 3 - Finding Financial Information Refer to the...Ch. 3 - Finding Financial Information Refer to the...Ch. 3 - Comparing Companies within an Industry Refer to...Ch. 3 - Analyzing a Company over Time Refer to the annual...Ch. 3 - Prob. 3.6CPCh. 3 - Evaluating an Ethical Dilemma Mike Lynch is the...
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.Similar questions
- Last year, Nikkola Company had net sales of 2.299.500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. Required: Note: Round answers to one decimal place. 1. Calculate the average accounts receivable. 2. Calculate the accounts receivable turnover ratio. 3. Calculate the accounts receivable turnover in days.arrow_forwardFINANCIAL RATIOS Use the work sheet and financial statements prepared in Problem 15-8B. All sales are credit sales. The Accounts Receivable balance on January 1 was 38,200. REQUIRED Prepare the following financial ratios: (a)Working capital (b)Current ratio (c)Quick ratio (d)Return on owners equity (e)Accounts receivable turnover and the average number of days required to collect receivables (f)Inventory turnover and the average number of days required to sell inventoryarrow_forwardDuring March, Sam Company had cash sales of $35,000 and sales on account of $210,000. In April, payments on account totaled $175,000. The journal entry prepared by Sam to record the March sales would include a debit to: A. Cash for $35,000, debit to accounts receivable for $210,000, and credit to sales revenue for $245,000 B. Cash for $35,000, debit to deferred revenue for $210,000, and credit to sales revenue for $245,000 C. Cash for $35,000, debit to accounts payable for $210,000, and credit to sales revenue for $245,000 D. Cash and credit to sales revenue for $35,000arrow_forward
- Managerial accountingarrow_forwardUsing the following information: a. Beginning cash balance on March 1, $80,00. b. Cash receipts from sales, $306,000. c. Cash payments for direct materials, $135,000. d. Cash payments for direct labor, $73,000. e. Cash payments for overhead, $41,000. f. Cash payments for sales commissions, $7,000 g. Cash payments for interest, $110 (1% of beginning loan balance of $11,000) h. Cash repayment of loan, $11,000. Prepare a cash budget for March for Gado Company. GADO COMPANY Cash Budget March Total cash available Less: Cash payments for Total cash payments Loan activity Loan balance, end of month D-pptx A Presentation3.pptx 1 Jarvis CST 141.00...pptx A Musical Theatre Hi...ppt re to searcharrow_forwardUsing the following information: a. Beginning cash balance on March 1, $82,000. b. Cash receipts from sales, $308,000. c. Cash payments for direct materials, $132,000. d. Cash payments for direct labor, $76,000. e. Cash payments for overhead, $40,000. f. Cash payments for sales commissions, $7,000 g. Cash payments for interest, $200 (1% of beginning loan balance of $20,000) h. Cash repayment of loan, $20,000. Prepare a cash budget for March for Gado Company. Total cash available Less: Cash payments for Total cash payments Preliminary cash balance Loan activity GADO COMPANY Cash Budget March 0 0 0arrow_forward
- Using the following information: a. Beginning cash balance on March 1, $76,000. b. Cash receipts from sales, $305,000. c. Cash payments for direct materials, $134,000. d. Cash payments for direct labor, $77,000. e. Cash payments for overhead, $41,000. f. Cash payments for sales commissions, $8,000 g. Cash payments for interest, $150 (1% of beginning loan balance of $15,000) h. Cash repayment of loan, $15,000. Prepare a cash budget for March for Gado Company. GADO COMPANY Cash Budget March Total cash available Less: Cash payments for Total cash payments Loan activity Loan balance, end of montharrow_forwardForest Company had the following transactions during the month of December. What is the December 31 cash balance? Cash Sales 3, 250.00 Payments for Inventory 1760.00 Investment by the owners 3000.00 Supplies Used 175.00 Cash Withdrawals 260.00 Inventory received 2,500.00 Wages paid 2,390.00 Cash Balance Dec. 1 4,250.00arrow_forwardUsing the following information: a. Beginning cash balance on March 1, $78,000. b. Cash receipts from sales, $301,000. c. Cash payments for direct materials, $131,000. d. Cash payments for direct labor, $77,000. e. Cash payments for overhead, $39,000. f. Cash payments for sales commissions, $7,000 g. Cash payments for interest, $100 (1% of beginning loan balance of $10,000) h. Cash repayment of loan, $10,000. Prepare a cash budget for March for Gado Company.arrow_forward
- Using the following information: a. Beginning cash balance on March 1, $77,000. b. Cash receipts from sales, $300,000. c. Cash payments for direct materials, $139,000. d. Cash payments for direct labor, $72,000. e. Cash payments for overhead, $43,000. f. Cash payments for sales commissions, $7,000 g. Cash payments for interest, $120 (1% of beginning loan balance of $12,000) h. Cash repayment of loan, $12,000. Prepare a cash budget for March for Gado Company. GADO COMPANY Cash Budget March Total cash available Less: Cash payments for Total cash payments Preliminary cash balance Loan activity Ending cash balance Loan balance, end of montharrow_forwardUsing the following information: a. Beginning cash balance on March 1, $81,000. b. Cash receipts from sales, $309,000. c. Cash payments for direct materials, $134,000. d. Cash payments for direct labor, $73,000. e. Cash payments for overhead, $43,000. f. Cash payments for sales commissions, $8,000 g. Cash payments for interest, $130 (1% of beginning loan balance of $13,000) h. Cash repayment of loan, $13,000. Prepare a cash budget for March for Gado Company. GADO COMPANY Cash Budget March Beginning cash balance Add: Cash receipts from sales Total cash available Less: Cash payments for 81,000 309,000 390,000 Direct materials 134,000 Direct labor 73,000 Overhead 43,000 Sales commissions 8,000 Interest on loan 130 Total cash payments 258,130 Ending cash balance $ 131,870 Loan activity Beginning cash balance 13,000 Repayment of Bank loan 118,870 Loan balance, end of month %24arrow_forwardCompany A had the following transactions during the month of January: Sales revenue: $50,000 Cost of goods sold: $25,000 Operating expenses: $10,000 Interest expense: $2,000 Income tax expense: $5,000 Calculate the net income for Company A during the month of January.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
College Accounting, Chapters 1-27 (New in Account...AccountingISBN:9781305666160Author:James A. Heintz, Robert W. ParryPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
College Accounting, Chapters 1-27 (New in Account...
Accounting
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License