Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system a
nd the gross method. Apr. 2 Purchased $6,500 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point. 3 Paid $300 cash for shipping charges on the April 2 purchase. 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $900. 17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise. 18 Purchased $12,300 of merchandise from Frist Corp. with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination. 21 After negotiations, received from Frist a $500 allowance toward the $12,300 owed on the April 18 purchase. 28 Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.
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Answer:
The Net Income in terms of Cash is $13600 while that of accrual basis is $24000.
Explanation:
As the complete question is not given, a similar question is found online and is attached herewith.
By using the given data
Cash Values are given as
Revenues=$46000
Expenses Paid=$23400
Prepaid Cost=$9000
Total Expense Cash=Expense Paid +Prepaid Cost
Total Expense Cash=$23400 +$9000
Total Expense Cash=$32400
So the Net Income in terms of Cash is given as
Cash Net Income=Cash Revenue-Total Expense Cash
Cash Net Income=$46000-$32400
Cash Net Income=$13600
So the Net Income in terms of Cash is $13600.
Cash Values are given as
Earned Revenues=$54000
Incurred Expenses=$30000
So the Net Income in terms of Accrual is given as
Accrual Net Income=$54000-$3000
Accrual Net Income=$24000
So the Net Income in terms of Accrual is $24000.
Answer
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Explanation
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