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Accrual and Cash Basis

This document contains 10 accounting problems analyzing companies' financial statements on both an accrual and cash basis. Problem 14-1 shows Zeta Company had total sales of $4.25 million on a cash basis after accounting for changes in accounts receivable. Problem 14-2 shows Kew Company had total sales of $3.115 million on a cash basis after changes in accounts receivable and collections. Problem 14-3 shows Spee Company had total sales of $5 million on a cash basis after changes in accounts receivable, sales discounts, and collections.

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She Enna Ortaleza Ulap
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313 views4 pages

Accrual and Cash Basis

This document contains 10 accounting problems analyzing companies' financial statements on both an accrual and cash basis. Problem 14-1 shows Zeta Company had total sales of $4.25 million on a cash basis after accounting for changes in accounts receivable. Problem 14-2 shows Kew Company had total sales of $3.115 million on a cash basis after changes in accounts receivable and collections. Problem 14-3 shows Spee Company had total sales of $5 million on a cash basis after changes in accounts receivable, sales discounts, and collections.

Uploaded by

She Enna Ortaleza Ulap
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Sheena Loryne O.

Ulap “Intermediate Accounting 3”

BSA 2-1

PROBLEM 14-1
“ZETA COMPANY”

Accounts Receivable- Jan 1 1000000


Add: Sales-2019 4600000
Total 5600000
130000
Less: Accounts Receivable- Dec 31 0
Accounts Write off 50000 1350000
Total Sales (cash basis) 4250000 D

PROBLEM 14-2
“KEW COMPANY”

Accounts Receivable- Dec 31, 2018 400000


Credit Sales 3000000
Total 3400000
Less: Accounts Receivable- Dec 31, 2019 485000
Collections 2915000
Cash Sales 200000
Total Sales (cash basis) 3115000 C

PROBLEM 14-3
“SPEE COMPANY”

Accounts Receivable- Jan 1 1000000


Add:Credit Sales 3000000
Total 4000000
Less: Accounts Receivable- Dec 31 750000
Sales Discounts 150000 900000
Collections 3100000
Cash Sales-net (2000000-100000) 1900000
Total Sales (cash basis) 5000000 A
PROBLEM 14-4
“JACQUELINE COMPANY”

Accounts Receivable- Jan 1 1000000


Sales on Account 3000000
Total 4000000
Less: Accounts Receivable- Dec 31 1680000
Accounts Written Off 120000
Collections 2200000
Cash Sales 500000
Total Sales (cash basis) 2700000 A

PROBLEM 14-5
“EASTER COMPANY”

Insurance Expense 625000


Prepaid Insurance-Dec 31 175000
Prepaid Insurance-Jan 1 150000
Insurance Premium Paid 650000 D

PROBLEM 14-6
“SEASIDE COMPANY”

320000
Operating Expense per book 0
-
100000
Depreciation 0
Prepaid Insurance-Dec 31 200000
Prepaid Insurance-Jan 1 -150000
Accrued Salaries Payable- Dec 31 -100000
Accrued Salaries Payable- Jan 1 120000
227000
Cash paid for Operating Expense 0 B

PROBLEM 14-7
“HAMTIKAN COMPANY”

Rental Income (accrual basis) 600000


Unearned Rental Income- Jan
1 -50000
Unearned Rental Income- Dec 31 75000
Accrued Rental Income- Jan 1 30000
Accrued Rental Income- Dec 31 -40000
Rental Received (cash basis) 615000 B

PROBLEM 14-8
“ROYAL COMPANY”

210000
Inventory-Jan 1 0
570000
Add:Purchases (accrual basis) 0
780000
Goods available for sale 0
250000
Less:Inventory-Dec 31 0
530000
Cost of goods sold 0

120000
Accounts Payable- Jan 1 0
570000
Purchases (accrual basis) 0
690000
Total 0
135000
Accounts Payable- Dec 31 0
555000
Cash paid for purchases (cash basis) 0 A

PROBLEM 14-9
“TORY PROPRIETORSHIP”

Capital- Feb 1 200000


Cash Basis Income (Feb-Mar) 500000
Total 700000
Withdrawal 100000
Capital (March 31) 600000 C

PROBLEM 14-10
“REID COMPANY”

Accounts Receivable-Dec 31, 2018 500000


175000
Add: Sales 0
225000
Total 0
Less: Accounts Receivable-Dec 31, 2019 300000
195000
Total Sales 0 C

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