Selma operates a contractor's supply store. She maintains her books using the cash method. At the end of 2022, her accountant computes her accrual basis income that is used on her tax return. For 2022, Selma had cash receipts of $1,400,000, which included $200,000 collected on accounts receivable from 2021 sales. It also included the proceeds of a $100,000 bank loan. At the end of 2022, she had $250,000 in accounts receivable from customers, all from 2022 sales. a. Compute Selma's accrual basis gross revenues for 2022. b. Selma paid cash for all of the purchases. The total amount paid for merchandise in 2022 was $1,300,000. At the end of 2021, she had merchandise on hand with a cost of $150,000. At the end of 2022, the cost of merchandise on hand was $300,000. Compute Selma's gross income (profit) from merchandise sales for 2022. The cost of goods sold for 2022 under the accrual method is $ under the accrual basis is $ Therefore, the gross profit from merchandise sales for 2022

Selma operates a contractor's supply store. She maintains her books using the cash method. At the end of 2022, her accountant computes her accrual basis income that is used on her tax return. For 2022, Selma had cash receipts of $1,400,000, which included $200,000 collected on accounts receivable from 2021 sales. It also included the proceeds of a $100,000 bank loan. At the end of 2022, she had $250,000 in accounts receivable from customers, all from 2022 sales. a. Compute Selma's accrual basis gross revenues for 2022. b. Selma paid cash for all of the purchases. The total amount paid for merchandise in 2022 was $1,300,000. At the end of 2021, she had merchandise on hand with a cost of $150,000. At the end of 2022, the cost of merchandise on hand was $300,000. Compute Selma's gross income (profit) from merchandise sales for 2022. The cost of goods sold for 2022 under the accrual method is $ under the accrual basis is $ Therefore, the gross profit from merchandise sales for 2022

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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