Problem 5 Evaluate the following items, and determine the correct amount to report on the income statement for each, using the acerual basis of accounting for the referenced period of time. A Company had beginning accounts receivable of $16,000. The company reported cash basis revenues of $200,000. The ending accounts receivable amounted to $36,000. B Company purchased $50,000 of supplies. Supplies on hand decreased by $10,000 during the period. C Company started the year with no prepaid rent, and ended the year with $2,000 in prepaid rent. Rent expense on a cash basis was $26,000. Revenues Supplies Rent Equipment A the beginning of the year, D Company purchased and expensed an item of equipment for $40,000. The equipment has a 4-year life, and will be worthless after four years. There were no wages payable at the beginning of the year. E Company paid $290,000 in wages during the year, and owed an additional $24,000 at year's end. Wages
Problem 5 Evaluate the following items, and determine the correct amount to report on the income statement for each, using the acerual basis of accounting for the referenced period of time. A Company had beginning accounts receivable of $16,000. The company reported cash basis revenues of $200,000. The ending accounts receivable amounted to $36,000. B Company purchased $50,000 of supplies. Supplies on hand decreased by $10,000 during the period. C Company started the year with no prepaid rent, and ended the year with $2,000 in prepaid rent. Rent expense on a cash basis was $26,000. Revenues Supplies Rent Equipment A the beginning of the year, D Company purchased and expensed an item of equipment for $40,000. The equipment has a 4-year life, and will be worthless after four years. There were no wages payable at the beginning of the year. E Company paid $290,000 in wages during the year, and owed an additional $24,000 at year's end. Wages
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter5: Accounting For Retail Businesses
Section: Chapter Questions
Problem 5PB: Multiple-step income statement and balance sheet The following selected accounts and their current...
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