On January 1, 2025, Norma Smith and Grant Wood formed a computer sales and service company in Soapsville, Arkansas, by investing $91,316 cash. The new company, Sheffield Sales and Service, has the following transactions during January. 1. Pays $12,000 in advance for 3 months' rent of office, showroom, and repair space. 2. Purchases 42 personal computers at a cost of $ 1,664 each, 8 graphics computers at a cost of $2,664 each, and 27 printers at a cost of $464 each, paying cash upon delivery. 3. Sales, repair, and office employees earn $13,916 in salaries and wages during January, of which $4,316 was still payable at the end of January. 4. Sells 32 personal computers at $2,714 each, 6 graphics computers for $3,764 each, and 17 printers for $664 each; $76,316 is received in cash in January, and $44,404 is sold on a deferred payment basis. 5. Other operating expenses of $9,716 are incurred and paid for during January; $3,316 of incurred expenses are payable at January 31. (a) Using the transaction data above, prepare (1) a cash - basis income statement and (2) an accrual - basis income statement for the month of January Using the transaction data above, prepare (1) a cash-basis balance sheet and (2) an accrual-basis balance sheet as of January 31, 2025
On January 1, 2025, Norma Smith and Grant Wood formed a computer sales and service company in Soapsville, Arkansas, by investing $91,316 cash. The new company, Sheffield Sales and Service, has the following transactions during January. 1. Pays $12,000 in advance for 3 months' rent of office, showroom, and repair space. 2. Purchases 42 personal computers at a cost of $ 1,664 each, 8 graphics computers at a cost of $2,664 each, and 27 printers at a cost of $464 each, paying cash upon delivery. 3. Sales, repair, and office employees earn $13,916 in salaries and wages during January, of which $4,316 was still payable at the end of January. 4. Sells 32 personal computers at $2,714 each, 6 graphics computers for $3,764 each, and 17 printers for $664 each; $76,316 is received in cash in January, and $44,404 is sold on a deferred payment basis. 5. Other operating expenses of $9,716 are incurred and paid for during January; $3,316 of incurred expenses are payable at January 31. (a) Using the transaction data above, prepare (1) a cash - basis income statement and (2) an accrual - basis income statement for the month of January Using the transaction data above, prepare (1) a cash-basis balance sheet and (2) an accrual-basis balance sheet as of January 31, 2025
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 80EDC
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Transcribed Image Text:On January 1, 2025, Norma Smith and Grant Wood formed a computer sales and service company in Soapsville, Arkansas, by investing $91, 316 cash. The new company, Sheffield Sales and
Service, has the following transactions during January. 1. Pays $12,000 in advance for 3 months' rent of office, showroom, and repair space. 2. Purchases 42 personal computers at a cost of $
1,664 each, 8 graphics computers at a cost of $2, 664 each, and 27 printers at a cost of $464 each, paying cash upon delivery. 3. Sales, repair, and office employees earn $13,916 in salaries and
wages during January, of which $4, 316 was still payable at the end of January. 4. Sells 32 personal computers at $2,714 each, 6 graphics computers for $3,764 each, and 17 printers for $664 each;
$76,316 is received in cash in January, and $44, 404 is sold on a deferred payment basis. 5. Other operating expenses of $9, 716 are incurred and paid for during January; $3,316 of incurred
expenses are payable at January 31. (a) Using the transaction data above, prepare (1) a cash - basis income statement and (2) an accrual - basis income statement for the month of January Using
the transaction data above, prepare (1) a cash - basis balance sheet and (2) an accrual - basis balance sheet as of January 31, 2025
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