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
Question
Chapter 2, Problem 2.13BE
To determine
Accrual basis accounting:
According to this basis of accounting, revenue should be recognized at the time when it is earned, irrespective of whether the cash received or not, and expense should be recognized at the time when it is incurred, irrespective of whether it is paid or not.
To Determine: The accrual net income for the year 2018.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
D 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
2500,000
310 Chapter 9
Statement of Financial Position Presentation: Cash and Other Related
Items
9-15.
Genius Company is preparing its 2016 financial statements; the accounting
period ends December 31. The following items, related to cash, are under
consideration. You have been asked to indicate how each item should be
reported on the statement of financial position and to explain the basis for
your responses.
a.
A P900 check received from a customer, dated February 1, 2017, is on
hand.
b. A customer's check was included in the December 20 deposit. It was
returned by the bank stamped NSF. No entry has yet been made by
Genius to reflect the return.
c. A P20,000 note receivable on which P1,000 of interest accrued to
December 31 has just been recorded by debiting interest receivable
and crediting interest revenue. The chief accountant proposes to report
the P20,000 as cash in bank.
d. Genius has a P200 petty cash fund. As of December 31, the fund
cashier reported expense vouchers covering various…
37
The cash in bank of AA Company in BB (Bank) had a balance per book of P1,920,000 as of December 31, 2022.
The details below are related to BB Bank account:
A P66,800 customer’s check payable to the company, dated January 3, 2023, with O.R. no. 18932 was included in the December 31 balance.
An P18,000 check payable to a supplier dated January 2, 2023 was released on December 28, 2022 and recorded on this date.
A customer collection during December amounting to P345,000 was recorded by the accountant at P354,000.
Outstanding checks as of December 31, 2022 amounted to P238,500 were recorded as disbursements from the cash in BB Bank account.
What is the correct balance of cash in BB as of December 31, 2022?
Chapter 2 Solutions
Intermediate Accounting
Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - What is an unadjusted trial balance? An adjusted...Ch. 2 - Define adjusting entries and discuss their...Ch. 2 - Define closing entries and their purpose.Ch. 2 - Define prepaid expenses and provide at least two...Ch. 2 - Deferred revenues represent liabilities recorded...Ch. 2 - Define accrued liabilities. What adjusting journal...Ch. 2 - Prob. 2.17QCh. 2 - [Based on Appendix A] What is the purpose of a...Ch. 2 - [Based on Appendix B] Define reversing entries and...Ch. 2 - [Based on Appendix C] What is the purpose of...Ch. 2 - Prob. 2.21QCh. 2 - Transaction analysis LO21 The Marchetti Soup...Ch. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Prob. 2.3BECh. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; income determination LO24,...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Income determination LO24 If none of the...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Closing entries LO27 The year-end adjusted trial...Ch. 2 - Prob. 2.13BECh. 2 - Transaction analysis LO21 The following...Ch. 2 - Journal entries LO22 Prepare journal entries to...Ch. 2 - T-accounts and trial balance LO23 Post the...Ch. 2 - Journal entries LO22 The following transactions...Ch. 2 - Prob. 2.5ECh. 2 - Debits and credits LO22 Indicate whether a debit...Ch. 2 - Transaction analysis; debits and credits LO22...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; solving for unknowns LO24,...Ch. 2 - Adjusting entries LO25 The Mazzanti Wholesale...Ch. 2 - Financial statements and closing entries LO26,...Ch. 2 - Closing entries LO27 American Chip Corporations...Ch. 2 - Prob. 2.14ECh. 2 - Cash versus accrual accounting; adjusting entries ...Ch. 2 - External transactions and adjusting entries LO22,...Ch. 2 - Accrual accounting income determination LO24,...Ch. 2 - Cash versus accrual accounting LO28 Stanley and...Ch. 2 - Prob. 2.19ECh. 2 - Worksheet Appendix 2A The December 31, 2018,...Ch. 2 - Reversing entries Appendix 2B The employees of...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Special journals Appendix 2C The White Companys...Ch. 2 - Prob. 2.25ECh. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Adjusting entries LO25 Pastina Company sells...Ch. 2 - Accounting cycle; adjusting entries through...Ch. 2 - Adjusting entries LO25 Howarth Companys fiscal...Ch. 2 - Accounting cycle LO22 through LO27 The general...Ch. 2 - Adjusting entries and income effects LO22, LO25...Ch. 2 - Adjusting entries LO25 Excalibur Corporation...Ch. 2 - Accounting cycle; unadjusted trial balance through...Ch. 2 - Prob. 2.10PCh. 2 - Prob. 2.11PCh. 2 - Cash versus accrual accounting LO28 Zambrano...Ch. 2 - Worksheet Appendix 2A Using the information from...Ch. 2 - Judgment Case 21 Cash versus accrual accounting;...Ch. 2 - Prob. 2.2BYPCh. 2 - Communication Case 23 Adjusting entries LO24 I...Ch. 2 - Continuing Cases Target Case LO24, LO28 Target...
Knowledge Booster
Similar questions
- QUESTION 1 The summary of the bank column in the cash book of APINO Ltd. for the month ended October 31, 2020 is presented to you below; CASH BOOK Bal. b/d 11,000 Total Payments 54,000 Receipts 79,000 Bal. c/d 36,000 90,000 90,000 When the bank statement of the company was received on 31st October 2020, it showed a balance which differed from that of the cash book. Your investigation of the accounting records for the period reveals the following information. Bank charges of GH¢320 appear in the bank statement on 30th October 2020 but have not been recorded in the cash book. Cheques from a customer Papa Kay totaling GH¢2,890 entered in the cash book on 29th October, 2020 were credited by the bank on 2nd November, 2020. A cheque for GH¢ 1,000 entered in the cash book was yet to be submitted for payment by the payee. A cheque for GH¢12, 900 drawn by APINO Ltd. To pay for a new item of plant had been mistakenly entered…arrow_forwardComplete the financial statement for MY Company. Cash Receivables Inventories Prepaid expenses Total current assets Plant assets Other assets Total assets . $95 575 822 [Select] Type of Financial Statement: [Select] [ Select] [ Select] 2,800 $8.400 . Debt Ratio is 0.6 Current Ratio is 1.2 MY Company December 31, 2018 (Dollars in thousands) V > Total current $1.700 liabilities Long- term debt Other long- term liabilities Share capital Total liabilities [ Select] and equity 810 Retained 2.645 earnings 183 Use the following data to complete MY Company's Balance Sheet. [Select]arrow_forwardHogan Company had the following account balances for 2021: Accounts receivable Accounts payable Prepaid insurance Multiple Choice Hogan reported net income of $350,000 for 2021. Assuming no other changes in current account balances, what is the amount of net cash provided by operating activities for 2021 reported in the statement of cash flows? O $346,500. O $331,000. O $324,500. O Dec. 31 $42,500 62,000 17,500 $362,500. Jan. 1 $36,000 51,000 9,500arrow_forward
- Question 2 Jordan Inc is trying to prepare a cash reconciliation for the month ended January 31, 2024. At that date, Jordan's books report a balance of $81,673 in their CIBC Chequing Account, and the balance on their January bank statement is $107,876. Jordan provides you with (1) the General Ledger which shows all the changes in the cash account during the year, and (2) a copy of the January bank statement. CIBC Chequing Account Description Opening balance Payment on account (cheque #1348) Date Jan 1 Jan 5 Jan 10 Jan 10 Jan 15 Jan 15 Jan 20 Jan 25 Jan 25 Jan 27 Jan 30 Jan 31 Jan 31 BUS285 Date January 1 January 1 January 4 January 5 January 11 January 11 Jordan Inc. General Ledger Month ended January 31, 2024 Cash out Interac machine Bank deposit January 12 January 14 January 15 January 15 January 21 January 25 January 27 January 27 January 31 Interac purchase - Tim Hortons Transfer to credit card payable Cash out Interac machine Payment on account (cheque #1349) Bank deposit CIBC…arrow_forward● Sanders, Inc. reported net income of $205. Beginning and ending balances of accounts receivable were $40 and $45, respectively. • Accounts payable balances at the beginning and ending of the year were $35 and $33, respectively. Assuming all relevant information has been presented, Sanders should report net operating cash flows of: A $198 $202 с $205 D $212 E None of thesearrow_forwardQuestion 3 of 4 > -/2 View Policies Current Attempt in Progress Ouellette Ltée reports the following items: cash in bank $17,500; payroll bank account $6,000; cash register floats $500; and trading investments consisting of term deposits with maturity dates of less than 90 days $5,000. Determine which items described above would be considered cash, cash equivalents, or other items to be reported on the statement of financial position. Cash in bank Payroll bank account Cash register floats Trading investments eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answerarrow_forward
- ces The chief accountant for Grandview Corporation provides you with the company's 2024 statement of cash flows and income statement. The accountant has asked for your help with some missing figures in the company's comparative balance sheets. These financial statements are shown next ($ in millions). Cash Flows from Operating Activities: Collections from customers GRANDVIEW CORPORATION Statement of Cash Flows For the Year Ended December 31, 2024 Payment to suppliers Payment of general and administrative expense Payment of income taxes Net cash flows from operating activities Cash Flows from Investing Activities: Sale of investments Cash Flows from Financing Activities: Issuance of common stock Payment of dividends Net cash flows from financing activities Net increase in cash GRANDVIEW CORPORATION Income Statement For the Year Ended December 31, 2024 Sales revenue Cost of goods sold Gross profit Operating expenses: General and administrative expense Depreciation expense Total operating…arrow_forwardCash Receipts from Customers Singleton Inc. had accounts receivable of $22,150 at January 1, 2019, and $26,850 at December 31, 2019. Net income for 2019 was $125,300 and sales revenue was $1,240,000. Required: Compute the amount of cash collected from customers using the direct method.arrow_forwardExercise 21-4 (Algo) Summary entries for cash received from customers [LO21-3] For each of the three independent situations determine the amount of cash received from the customers and prepare journal entries that summarize the selling and collection activities for the reporting period. All dollars are in millions. Complete this question by entering your answers in the tabs below. Cash Recd from Cust General Journal Determine the amount of cash received from the customers. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Sales Revenue Situation 1 155 2 155 3 155 Accounts Receivable Cash Received from Increase (Decrease) Customers 0 19 (19)arrow_forward
- Current Attempt in Progress Your examination of the records of a company that follows the cash basis of accounting tells you that the company's reported cash- basis earnings in 2022 are $30,500. If this firm had followed accrual-basis accounting practices, it would have reported the following year-end balances. 2022 $3,800 Accounts receivable Supplies on hand Unpaid wages owed 2,160 2,340 Other unpaid expenses 1.430 1.340 2021 $2,900 1,380 1.550 Determine the company's net earnings on an accrual basis for 2022. Net earnings on an accrual basis for 2022 sarrow_forwardQuestion 17 The following information is available to reconcile Gulf Company's cash book balance with its bank statement balance as of December 31, 2019. 1. On Dec 31, the company's cash account has a $5,400 debit balance, but its December's bank statement shows a balance of S6,500. ii. Check No. 0121 for $1,054 and Check No. 0142 for $766 were issued by Gulf Company but were still outstanding for the payment by the bank on December 31st. 111. Branch's December 31st daily cash receipts of $4,000 were placed in the bank's night depository on that date but do not appear on the December 31st bank statement. iv. A credit memorandum enclosed with the December bank statement indicates the bank collected directly an interest amounting $4,540 in cash on a long-term note and credited in its account. Gulf Company had not recorded this transaction in the cash book before receiving the statement. v. A debit memorandum for $1,200 lists a NSF (Not Sufficient Fund) check. The check had been received…arrow_forwardProblem 3. The books of Marikit’s Service, Inc. disclosed a cash balance of P687,570 on December31, 2020. The bank statement as of December 31 showed a balance of P547,800. Additionalinformation that might be useful in reconciling the two balances follows:a. Check number 748 for P30,000 was originally recorded on the books as P45,000.b. A customer’s note dated September 25 was discounted on October 12. The note wasdishonored on December 29 (maturity date). The bank charged Marikit’s account forP142,650, including a protest fee of P2,650.c. The deposit of December 24 was recorded on the books as P28,950, but it was actually adeposit of P27,000.d. Outstanding check totaled P98,850 as of December 31.e. There were bank service charges for December of P2,100 not yet recorded on the books.f. Marikit’s account had been charged on December 26 for a customer’s NSF for check forP12,960g. Marikit properly deposited P6,000 on December 3 that was not recorded by the bank.h. Receipts of December 31…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub