Listed below are several transactions that took place during the second and third years of operations for the RPG Company. Year 2 Year 3 Amounts billed to customers for services rendered $ 410,000 $ 510,000 Cash collected from credit customers 320,000 460,000 Cash disbursements: Payment of rent 86,000 0 Salaries paid to employees for services rendered during the year 146,000 166,000 Utilities 36,000 46,000 Advertising 18,000 41,000 In addition, you learn that the company incurred advertising costs of $31,000 in year 2, owed the advertising agency $5,600 at the end of year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated 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.
Listed below are several transactions that took place during the second and third years of operations for the RPG Company. Year 2 Year 3 Amounts billed to customers for services rendered $ 410,000 $ 510,000 Cash collected from credit customers 320,000 460,000 Cash disbursements: Payment of rent 86,000 0 Salaries paid to employees for services rendered during the year 146,000 166,000 Utilities 36,000 46,000 Advertising 18,000 41,000 In addition, you learn that the company incurred advertising costs of $31,000 in year 2, owed the advertising agency $5,600 at the end of year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated 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.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 11RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...
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Listed below are several transactions that took place during the second and third years of operations for the RPG Company.
| Year 2 | Year 3 | |||||
| Amounts billed to customers for services rendered | $ | 410,000 | $ | 510,000 | ||
| Cash collected from credit customers | 320,000 | 460,000 | ||||
| Cash disbursements: | ||||||
| Payment of rent | 86,000 | 0 | ||||
| Salaries paid to employees for services rendered during the year | 146,000 | 166,000 | ||||
| Utilities | 36,000 | 46,000 | ||||
| Advertising | 18,000 | 41,000 | ||||
In addition, you learn that the company incurred advertising costs of $31,000 in year 2, owed the advertising agency $5,600 at the end of year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated
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.
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