Wayne Rogers Corp. maintains its financial records on the cash basis of accounti

Question

Wayne Rogers Corp. maintains its financial records on the cash basis of accounting. Interested in securing a long-term loan from its regular bank, Wayne Rogers 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 2013, 2014, and 2015.

2013 2014 2015 Cash receipts from sales:   On 2013 sales 297,390 164,960 32,160   On 2014 sales 358,040 96,020   On 2015 sales 410,080 Cash payments for expenses:   On 2013 expenses 190,080 71,770 29,690   On 2014 expenses 49,570 a 174,610 62,330   On 2015 expenses 51,030 b 219,190
aPrepayments of 2014 expenses.
bPrepayments of 2015 expenses.
Wayne Rogers Corp. maintains its financial records on the cash basis of accounting. Interested in securing a long-term loan from its regular bank, Wayne Rogers 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 2013, 2014, and 2015.

2013 2014 2015 Cash receipts from sales:   On 2013 sales 297,390 164,960 32,160   On 2014 sales 358,040 96,020   On 2015 sales 410,080 Cash payments for expenses:   On 2013 expenses 190,080 71,770 29,690   On 2014 expenses 49,570 a 174,610 62,330   On 2015 expenses 51,030 b 219,190
aPrepayments of 2014 expenses.
bPrepayments of 2015 expenses. 2013 2014 2015
Exercise 3-19 Wayne Rogers Corp. maintains its financial records on the cash basis of accounting. Interested in securing a long-term loan from its regular bank, Wayne Rogers 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 2013, 2014, and 2015. aPrepayments of 2014 expenses. bPrepayments of 2015 expenses. Using the data above, prepare abbreviated income statements for the years 2013 and 2014 on the cash and accrued basis

Explanation / Answer

abbreviated income statement on cash basis

2013 2014

sales 297390 523000

less:Expenses 239650 297410

income 57740 225590

income statement on accrued basis

sales 494510 454060

less:expenses 120540 286510

income 373970 167550

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