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The following data represents the summarized transactions of XYZ Trading for the year 20CY, its second year of operations. P 750,000 P 60,000 1,050,000 Cash sales Purchase return & discounts Sales on accounts Collections from customers Sales returns & discounts Cash purchases Salaries and wages paid Store and office supplies paid Other operating expenses paid 4,500,000 4,300,000 300,000 80,000 100,000 450,000 Interest received 60,000 Equipment purchased Interest paid Purchases on account 3,000,000 600,000 Payment to creditors 2,700,000 50,000 Rental collections 140,000 Accounts receivable written off 10,000 Equipment was acquired at the beginning of its first year with a 10-year useful life. Additional Information at December 31, 20CY: Notes & A/c receivable, 12/31/CY Notes & A/c payable, 12/31/CY Notes & A/c receivable, 12/31/PY Notes & A/c payable, 13/31/PY Accrued salaries payable Accrued Interest payable Unused Store & office supplies Inventory, 12/31/CY Accrued Interest receivable P 320,000 P 540,000 210,000 300,000 110,000 10,000 75,000 600,000 15,000 Inventory, 12/13/PY Unearned rent income 500,000 20,000 Required: 1. Compute the following under Cash and Accrual basis of accounting: a. Total gross sales b. Total gross purchase C. Interest Income e. Interest expense 1. Salaries and wages g. Store and offices supplies expense h. Depreciation expense d. Rent Income 2. Statement of Comprehensive Income for the year ended December 31, 20CY under Cash basis of accounting. 3. Convert the Cash basis Income statement to Accrual basis of accounting. 4. Adjusting entries necessary to convert to Accrual basis.

The following data represents the summarized transactions of XYZ Trading for the year 20CY, its second year of operations. P 750,000 P 60,000 1,050,000 Cash sales Purchase return & discounts Sales on accounts Collections from customers Sales returns & discounts Cash purchases Salaries and wages paid Store and office supplies paid Other operating expenses paid 4,500,000 4,300,000 300,000 80,000 100,000 450,000 Interest received 60,000 Equipment purchased Interest paid Purchases on account 3,000,000 600,000 Payment to creditors 2,700,000 50,000 Rental collections 140,000 Accounts receivable written off 10,000 Equipment was acquired at the beginning of its first year with a 10-year useful life. Additional Information at December 31, 20CY: Notes & A/c receivable, 12/31/CY Notes & A/c payable, 12/31/CY Notes & A/c receivable, 12/31/PY Notes & A/c payable, 13/31/PY Accrued salaries payable Accrued Interest payable Unused Store & office supplies Inventory, 12/31/CY Accrued Interest receivable P 320,000 P 540,000 210,000 300,000 110,000 10,000 75,000 600,000 15,000 Inventory, 12/13/PY Unearned rent income 500,000 20,000 Required: 1. Compute the following under Cash and Accrual basis of accounting: a. Total gross sales b. Total gross purchase C. Interest Income e. Interest expense 1. Salaries and wages g. Store and offices supplies expense h. Depreciation expense d. Rent Income 2. Statement of Comprehensive Income for the year ended December 31, 20CY under Cash basis of accounting. 3. Convert the Cash basis Income statement to Accrual basis of accounting. 4. Adjusting entries necessary to convert to Accrual basis.

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...
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The following data represents the summarized transactions of XYZ Trading for the year 20CY, its second year of operations. Cash sales P 750,000 Purchase return & discounts P 60,000 Sales on accounts 4,500,000 Salaries and wages paid 1,050,000 Store and office supplies paid Other operating expenses paid Collections from customers 4,300,000 300,000 Sales returns & discounts 80,000 100,000 Cash purchases 450,000 Interest received 60,000 Purchases on account 3,000,000 Equipment purchased Interest paid 600,000 Payment to creditors Rental collections 2,700,000 50,000 140,000 Accounts receivable written off 10,000 Equipment was acquired at the beginning of its first year with a 10-year useful life. Additional Information at December 31, 20CY: Notes & A/c receivable, 12/31/CY Notes & A/c payable, 12/31/CY Notes & A/c receivable, 12//31/PY Notes & A/c payable, 13/31/PY Accrued salaries payable Accrued Interest payable Unused Store & office supplies Inventory, 12/31/CY Accrued Interest receivable Р 320,000 P 540,000 210,000 300,000 110,000 10,000 75,000 600,000 15,000 500,000 20,000 Inventory, 12/13/PY Unearned rent income Required: 1. Compute the following under Cash and Accrual basis of accounting: Total gross sales Total gross purchase e. Interest expense f. Salaries and wages а. b. g. Store and offices supplies expense h. Depreciation expense C. Interest Income d. Rent Income 2. Statement of Comprehensive Income for the year ended December 31, 20CY under Cash basis of accounting. 3. Convert the Cash basis Income statement to Accrual basis of accounting. 4. Adjusting entries necessary to convert to Accrual basis.
Transcribed Image Text:The following data represents the summarized transactions of XYZ Trading for the year 20CY, its second year of operations. Cash sales P 750,000 Purchase return & discounts P 60,000 Sales on accounts 4,500,000 Salaries and wages paid 1,050,000 Store and office supplies paid Other operating expenses paid Collections from customers 4,300,000 300,000 Sales returns & discounts 80,000 100,000 Cash purchases 450,000 Interest received 60,000 Purchases on account 3,000,000 Equipment purchased Interest paid 600,000 Payment to creditors Rental collections 2,700,000 50,000 140,000 Accounts receivable written off 10,000 Equipment was acquired at the beginning of its first year with a 10-year useful life. Additional Information at December 31, 20CY: Notes & A/c receivable, 12/31/CY Notes & A/c payable, 12/31/CY Notes & A/c receivable, 12//31/PY Notes & A/c payable, 13/31/PY Accrued salaries payable Accrued Interest payable Unused Store & office supplies Inventory, 12/31/CY Accrued Interest receivable Р 320,000 P 540,000 210,000 300,000 110,000 10,000 75,000 600,000 15,000 500,000 20,000 Inventory, 12/13/PY Unearned rent income Required: 1. Compute the following under Cash and Accrual basis of accounting: Total gross sales Total gross purchase e. Interest expense f. Salaries and wages а. b. g. Store and offices supplies expense h. Depreciation expense C. Interest Income d. Rent Income 2. Statement of Comprehensive Income for the year ended December 31, 20CY under Cash basis of accounting. 3. Convert the Cash basis Income statement to Accrual basis of accounting. 4. Adjusting entries necessary to convert to Accrual basis.
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