Exercise 3-19 2016 2017 2018 Exercise 3-19 Pronghorn Corp. maintains its financi
ID: 2329059 • Letter: E
Question
Exercise 3-19
2016
2017
2018
Exercise 3-19
Pronghorn Corp. maintains its financial records on the cash basis of accounting. Interested in securing a long-term loan from its regular bank, Pronghorn Corp. requests you as its independent CPA to convert its cash-basis income statement data to the accrual basis. You are provided with the following summarized data covering 2016, 2017, and 2018.2016
2017
2018
Cash receipts from sales: On 2016 sales $282,740 $170,360 $29,590 On 2017 sales –0– 362,530 92,100 On 2018 sales 423,990 Cash payments for expenses: On 2016 expenses 185,980 63,490 26,690 On 2017 expenses 43,820 a 161,920 58,410 On 2018 expenses 47,660 b 232,790aPrepayments of 2017 expenses.
bPrepayments of 2018 expenses.
Explanation / Answer
Income Statement on Cash Basis :-
2016
2017
Sales Revenue
282740
532890
Expenses
229800
273070
Net Income
52940
259820
Income Statement on Accrual Basis :-
2016
2017
Sales Revenue
482690
454630
Expenses
276160
264150
Net Income
206530
190480
2016
2017
Sales Revenue
282740
532890
Expenses
229800
273070
Net Income
52940
259820
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