Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Textbook Question
Chapter 2, Problem 2.8E
Cash vs. Accrual. you are provided the following information for the Del Campo Consulting Associates.
| 2019 | 2018 | |
| Service revenue (accrual basis) | $250,000 | $185,000 |
| Cash collected from clients | 80,000 | 97,000 |
| Operating expenses: | ||
| Salary expense (accrual basis) | 12,000 | 16,500 |
| Purchased supplies for cash | 4,000 | 2,500 |
| Purchased supplies on account | 1,500 | 1,000 |
| Depreciation expense | 2,000 | 2,000 |
| Rent paid in cash | 7,000 | 3,000 |
| Prepaid insurance | 5,500 | -0- |
Required:
Assume that all supplies purchased were used in operations in the year of purchase Rental payments pertain to rental space used in the year of payment.
- a. Prepare an income statement tor Del Campo tor 2019 and 2018 under both the cash and the accrual basis of accounting.
- b. Compute operating
cash flow for both years under cash and accrual bases.
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Students have asked these similar questions
In 2021, Hope Company incurred sales on account of $105,000. The company also has the following information:
December 31, 2021
December 31, 2020
Accounts Receivable
$21,500
$53,000
Accounts Payable
$72,000
$47,000
What is the amount of cash received from customers for Hope Company in 2021?
Multiple Choice
$114,400
$136,500
$105,000
$88,500
Direction: Prepare the Statement of Cash Flows for the year ended December 31, 2019.
Talent Fees receivables from clients
500,000
Cash receipt from clients
600,000
.
Depreciation expense
40,000
Proceeds of Japan bank loan
350,000
Cash purchase of building
800,000
Provision for doubtful accounts
28,000
Additional Investment of Lena
900,000
Dividends income received
23,000
Rent Income received
32,000
Payment of operating expenses
975,000
Principal long-term loan paid
600,000
Asset withdrawal of owner
125,000
Proceeds from sale of land
950,000
Preparation of SCF for a Single Proprietorship
Instructions:
Prepare a Statement of Cash Flows for the year ended December 31,2020 the using the following account titles listed.
Use the Direct Method.
You may use any desired business name.
Use the space provided for your answer.
Cash from Clients – 450,000
Cash Payment for merchandise – 410,500
Cash receipt from additional investment of owner – 114,450
Cash receipt from sale of equipment - 15,000
Cash withdrawal by the owner – 80,000
Cash, January 1, 2020 - 120,000
Credit sales – 35,000
Depreciation expense – 15,410
Paid loan from a bank - 111,000
Payment to interest expense – 10,000
Payment to suppliers – 20,000
Payment to utilities – 30,000
Payments to Employees – 14,800
Chapter 2 Solutions
Intermediate Accounting
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