Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 1, Problem 1.2E
Accrual accounting
• LO1–2
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 | $350,000 | $450,000 |
Cash collected from credit customers | 260,000 | 400,000 |
Cash disbursements: | ||
Payment of rent | 80,000 | –0– |
Salaries paid to employees for services rendered during the year | 140,000 | 160,000 |
Travel and entertainment | 30,000 | 40,000 |
Advertising | 15,000 | 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 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
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Eight Question
Question 17
Problem 10-01A
On January 1, 2022, the ledger of Cullumber Company contained these liability accounts.
Accounts Payable
$45,000
Sales Taxes Payable
9,100
Unearned Service Revenue
21,500
During January, the following selected transactions occurred.
Jan. 1
Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note.
5
Sold merchandise for cash totaling $5,936, which includes 6% sales taxes.
12
Performed services for customers who had made advance payments of $12,500. (Credit Service Revenue.)
14
Paid state treasurer’s department for sales taxes collected in December 2021, $9,100.
20
Sold 750 units of a new product on credit at $54 per unit, plus 6% sales tax.
During January, the company’s employees earned wages of $52,000. Withholdings related to these wages were $3,978 for Social Security (FICA), $5,686 for federal income tax, and $1,706 for state income tax. The company owed no money related to these earnings for federal or state…
Chapter 1 Solutions
Intermediate Accounting
Ch. 1 - Prob. 1.1QCh. 1 - What is meant by the phrase efficient allocation...Ch. 1 - Identify two important variables to be considered...Ch. 1 - What must a company do in the long run to be able...Ch. 1 - Prob. 1.5QCh. 1 - Prob. 1.6QCh. 1 - Prob. 1.7QCh. 1 - Prob. 1.8QCh. 1 - Prob. 1.9QCh. 1 - Prob. 1.10Q
Ch. 1 - Prob. 1.11QCh. 1 - Prob. 1.12QCh. 1 - Prob. 1.13QCh. 1 - Prob. 1.14QCh. 1 - Prob. 1.15QCh. 1 - Explain what is meant by: The benefits of...Ch. 1 - Prob. 1.17QCh. 1 - Briefly define the financial accounting elements:...Ch. 1 - Prob. 1.19QCh. 1 - What is the going concern assumption?Ch. 1 - Prob. 1.21QCh. 1 - Prob. 1.22QCh. 1 - What are two advantages to basing the valuation of...Ch. 1 - Describe how revenue recognition relates to...Ch. 1 - What are the four different approaches to...Ch. 1 - In addition to the financial statement elements...Ch. 1 - Briefly describe the inputs that companies should...Ch. 1 - Prob. 1.28QCh. 1 - Prob. 1.29QCh. 1 - Prob. 1.30QCh. 1 - Prob. 1.31QCh. 1 - Prob. 1.32QCh. 1 - Accrual accounting LO12 Cash flows during the...Ch. 1 - Financial statement elements LO17 For each of the...Ch. 1 - Prob. 1.3BECh. 1 - Basic assumptions and principles LO17 through...Ch. 1 - Prob. 1.5BECh. 1 - Prob. 1.6BECh. 1 - Accrual accounting LO12 Listed below are several...Ch. 1 - Accrual accounting LO12 Listed below are several...Ch. 1 - Prob. 1.3ECh. 1 - Prob. 1.4ECh. 1 - Prob. 1.5ECh. 1 - Financial statement elements LO17 For each of the...Ch. 1 - Concepts; terminology; conceptual framework LO17...Ch. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10ECh. 1 - Basic assumptions and principles LO18, LO19...Ch. 1 - Prob. 1.12ECh. 1 - Prob. 1.13ECh. 1 - Prob. 1.14ECh. 1 - Prob. 1.15ECh. 1 - Prob. 1.1BYPCh. 1 - Research Case 12 Accessing SEC information through...Ch. 1 - Prob. 1.3BYPCh. 1 - Prob. 1.4BYPCh. 1 - Ethics Case 18 The auditors responsibility LO14...Ch. 1 - Prob. 1.9BYPCh. 1 - Judgment Case 110 GAAP, comparability, and the...Ch. 1 - Prob. 1.11BYPCh. 1 - Prob. 1.12BYPCh. 1 - Analysis Case 113 Expense recognition LO19...Ch. 1 - Prob. 1.14BYPCh. 1 - Real World Case 115 Elements; disclosures; The...Ch. 1 - Prob. 1.16BYPCh. 1 - Target Case LO19 Target Corporation prepares its...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Page 328 EXERCISE 7.9 Industry Characteristics and Collection Performance e LO7-8 The following information was taken from annual reports of Goodyear Tire & Rubber and PPL Corp.., a public utility: Goodyear PPL Net sales $18.1 billion $ 11.5 billion Average accounts receivable 2.3 billion 923 million a. Compute for each company the accounts receivable turnover rate for the year. b. Compute for each company the average number of days required to collect outstanding receivables (round answers to nearest whole day). c. Explain why the figures computed for Goodyear in parts a and b are so different from those computed for PPL.arrow_forwardD Question 6 An entity reported the following data on December 31,2019: Cash in bank, net of bank overdraft of 100,000 1200,000 PCF, including unreplenished expenses of 10,000 50,000 Notes receivables 750,000 A/R net customers account with credit balances of 200K 2,000,000 Inventory, excluding unrecorded purchase of 300,000 on account in transit shipped FOB SP on 12/31/19 2500,000arrow_forwardACCT 102 Please show calculations, thank you!arrow_forward
- Nine Questionarrow_forwardProblem 6-3: The Kissagram Corporation The Kissagram Corporation produced the following summary of its Accounts Receivable on October 31, 2021: Customer Total $ Notes Aniston 9000 25% over 30-60 days; Remainder 90. Leblanc 9000 100% > 90 days outstanding. Required 1. Prepare an aged schedule of Accounts Receivable. Use the following categories: 90 days (delinquent). 2. Compute the balance for the Allowance for Doubtful accounts (rounded to the nearest $). Assume bad debt percentages for each category of 0.7%, 7%, 12% and 22%. Upon completion, enter the following data here: Allowance for Doubtful Accounts submitarrow_forwardACCT 102 - Please Do All Three Subpartsarrow_forward
- Problem 19 When examining the accounts of Ayala Corporation, it is ascertained that balance relatingto both receivables and payables are included in a single controlling account called“Receivables control” that has a debit balance of P4,850,000. An analysis of the make-upof this account revealed the following:Debit Accounts receivable – customers 7,800,000Accounts receivable – officers 500,000Debit balances – creditors 300,000Postdated checks from customers 400,000Subscriptions receivable 800,000CreditAccounts payable for merchandise 4,500,000Credit balances in customer’s accounts 200,000Cash received in advance from customers 100,000Expected bad debts 150,000After further analysis of the aged accounts receivable, it is determined that the allowancefor doubtful accounts be P200,000. What is the correct total of current net receivables?__________.arrow_forwardfinancial accounting please give me the answer of this question thnaksarrow_forwardPROBLEM 1 Aljon Company reported the following as of December 31, 2021: Accounts receivables P100,000 Notes receivables 80,000 Allowance for doubtful accounts Installment receivables (normally receivable within 1 to 3 years) Customer's credit balances 27,000 150,000 20,000 Supplier's debit balances Advances to subsidiaries 10,000 35.000 Advances to suppliers 30.000 Advances to affiliates 40.000 Security deposit 85.000 Subscriptions receivable 22.000 How much is the total trade receivables as of December 31, 2021?arrow_forward
- Chapter 5 Exercises i Saved 49 Required information Part 4 of 7 (The following information applies to the questions displayed below.) On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances: Accounts Debit Credit 1 $ 26,100 14,700 Cash points Accounts Receivable Allowance for Uncollectible Accounts $ 3,000 Supplies Notes Receivable (6, due in 2 years) Land Skipped 3,600 15,000 80,000 Accounts Payable Conmon Stock Retained Earnings 7,900 95,000 33,500 eBook Totals $139,400 $139,400 Print During January 2021, the following transactions occur: 2 Provide services to customers for cash, $46,100. 6 Provide services to customers on account, $83,400. January January January 15 write off accounts receivable as uncollectible, $2,500. January 20 Pay cash for salaries, $32, 500. January 22 Receive cash on accounts receivable, $81,000. January 25 Pay cash on accounts payable, $6,600. January 30 Pay cash for utilities during January, $14,800. References…arrow_forwardProblem 19 When examining the accounts of Ayala Corporation, it is ascertained that balance relating to both receivables and payables are included in a single controlling account called "Receivables control" that has a debit balance of P4,850,000. An analysis of the make-up of this account revealed the following: Debit Credit 7,800,000 500,000 300,000 400,000 800,000 Accounts receivable – customers Accounts receivable – officers Debit balances – creditors Postdated checks from customers Subscriptions receivable Accounts payable for merchandise Y Y OF 4,500,000 200,000 100,000 Credit balances in customer's accounts Cash received in advance from customers Expected bad debts After further analysis of the aged accounts receivable, it is determined that the allowance for doubtful accounts be P200,000. What is the correct total of current net receivables? 150,000arrow_forwardProblem 5-3A Record transactions related to accounts receivable (LO5-3, 5-4, 5-5) [The following information applies to the questions displayed below.]The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations. June 12, 2021 Provide services to customers on account for $41,000. September 17, 2021 Receive $25,000 from customers on account. December 31, 2021 Estimate that 45% of accounts receivable at the end of the year will not be received. March 4, 2022 Provide services to customers on account for $56,000. May 20, 2022 Receive $10,000 from customers for services provided in 2021. July 2, 2022 Write off the remaining amounts owed from services provided in 2021. October 19, 2022 Receive $45,000 from customers for services provided in 2022. December 31, 2022 Estimate that 45% of accounts receivable at the end of the year will not be received. Problem 5-3A…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial & Managerial AccountingAccountingISBN:9781337119207Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
- Corporate Financial AccountingAccountingISBN:9781337398169Author:Carl Warren, Jeff JonesPublisher:Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:9781337398169
Author:Carl Warren, Jeff Jones
Publisher:Cengage Learning
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License