Question 1 The following transactions for Carleton Company occurred during Janua
ID: 2527808 • Letter: Q
Question
Question 1
The following transactions for Carleton Company occurred during January 2016:
Jan.
1
Purchased a two-year insurance policy for cash, $8,400
4
Paid utilities bill received December 2015, $450
9
Performed a service on account, $1,200
16
Paid bimonthly salary to employees, $2,700
21
Received $800 from a customer on account
25
Received $600 from January 9 transaction
30
Prepared the adjusting entry for insurance from January 1 transaction
30
Accrued wages of $2,750
Show the total amount of revenue and expense recognized under both the accrual basis and cash basis of accounting.
Accrual Basis
Revenue Total
Expense Total
Cash Basis
Revenue Total
Expense Total
Jan.
1
Purchased a two-year insurance policy for cash, $8,400
4
Paid utilities bill received December 2015, $450
9
Performed a service on account, $1,200
16
Paid bimonthly salary to employees, $2,700
21
Received $800 from a customer on account
25
Received $600 from January 9 transaction
30
Prepared the adjusting entry for insurance from January 1 transaction
30
Accrued wages of $2,750
Explanation / Answer
Answer:
Accrual Basis
Revenue Total
1200
Expense Total
8950
Cash Basis
Revenue Total
1400
Expense Total
11550
Working notes for the above answer is as under
1
calculation of the Accrual Basis
Revenue - Accrual Basis
Service
1200
Total
1200
Expanses- Accrual Basis
Insurance
3500
Salary
2700
Accrual Wages
2750
Total
8950
2
calculation of the Cash Basis
Revenue - Cash Basis
Service
800
Service
600
Total
1400
Expanses- Accrual Basis
Insurance
8400
Salary
450
Accrual Wages
2700
Total
11550
Accrual Basis
Revenue Total
1200
Expense Total
8950
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.