E1-2 Accrual accounting LO1-2 Listed below are several transactions that took place during the second and third years of operations for the RPG Company. Amounts billed to customers for services rendered Cash collected from credit customers Cash disbursements: Payment of rent Salaries paid to employees for services rendered during the year Travel and entertainment Advertising Year 2 $350,000 260,000 80,000 140,000 30,000 15,000 Year 3 $450,000 400,000 -0- 160,000 40,000 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 antici- pated bad debts on receivables, and the rent payment was for a two-year period, year 2 and year 3. 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 balance sheet at the end of year 2.

E1-2 Accrual accounting LO1-2 Listed below are several transactions that took place during the second and third years of operations for the RPG Company. Amounts billed to customers for services rendered Cash collected from credit customers Cash disbursements: Payment of rent Salaries paid to employees for services rendered during the year Travel and entertainment Advertising Year 2 $350,000 260,000 80,000 140,000 30,000 15,000 Year 3 $450,000 400,000 -0- 160,000 40,000 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 antici- pated bad debts on receivables, and the rent payment was for a two-year period, year 2 and year 3. 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 balance sheet at the end of year 2.

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter18: Acquiring Capital For Growth And Development

Section: Chapter Questions

Problem 2AP

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Use information from EA10. Compute the interest expense due when Barkers honors the note. Show the journal entry to recognize payment of the short-term note on December 4.
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