Answer:
The correct answer is E that is $74,520
Explanation:
The expected cash receipts for January from the current and past sales is computed as:
Cash sales for January = Budgeted sales × 20% cash collected
= $51,000 × 20%
= $10,200
Credit Sales is computed as:
For November is $13,000
For December = December Sales / 60 × 50
= $42,000 / 60 × 50
= $35,000
For January = Budgeted Sales × 80 %× 40%
= $51,000 × 80% × 40%
= $16,320
Total January Sales = Cash Sales + Credit Sales
= $10,200 + $13,000 + $35,000 + $16,320
= $74,520
Answer:
January 10
Explanation:
According to the revenue recognition principle of accrual accounting, revenue must be recognized when the earning process is completed. In this case, the earning process was completed on January 10 when the services were performed. The related cash inflows are not relevant at the time of considering service revenue.
the journal entries should be:
January 10, 202x
Dr Accounts receivable XY
Cr Service revenue XY
January 20, 202x
Dr Cash 0.5XY
Cr Accounts receivable 0.5XY
February 24, 202x
Dr Cash 0.5XY
Cr Accounts receivable 0.5XY
Answer:
Dr Retained earnings $14,000
Cr Inventory $14,000
Explanation:
There is a need to make adjustment to the inventory . Therefore,
Adjusted inventory
= New method of $171,000 - Old method of $185,000
= $14,000 decrease
It is to be noted that a lower inventory will have high costs associated with goods sold hence reduces profit/net income for the previous year by $14,000.
Also, the net income reports to retained earnings account hence decreases retained earnings.
Having made the above adjustment, we can assume that the average cost method was used for 2020 books.
Answer:
A. $302,000
Explanation:
The computation of the net income under accrual basis accounting is shown below:
= Billed in revenues on credit - incurred expenses
= $496,000 - $194,000
= $302,000
The prepaid expenses and the received amount would not be considered in the computation part. Hence, ignored it
Only revenues on credit and incurred expenses are considered in the computation part. No other item values would be taken.
It’s not is injected back into for the first
And “does not affect” is not the right answer either for the second slot
