Question

Dannon Co. reported its expenses of $35,200 on the cash basis. Corporate records revealed the following information: Beginning prepaid expense $1,300 Beginning accrued expense 1,650 Ending prepaid expense 1,800 Ending accrued expense 1,200 What amount of expense should the Dannon report on its books under the accrual basis?

Answer 1

Answer:

Explanation:

The computation of expense amount is shown below:

=  Expenses - adjusted prepaid expense + adjusted accrued expense

= $35,200 - $500 -  $450

=  $34,250

The adjusted prepaid expense is computed by

= Ending balance of prepaid expense - beginning balance of prepaid expense

= $1,800 - $1,300

= $500

And, the The adjusted accrued expense is computed by

= Ending balance of accrued expense - beginning balance of accrued expense

= $1,200 - $1,650

= -$450