Chapter 3 - Question 1.pdf - 1 Award 11.00 points Problems Adjust credit for all students E3-2 Reporting Cash Basis versus Accrual Basis Income LO3-3

Chapter 3 - Question 1.pdf - 1 Award 11.00 points Problems...

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1.Award: 11.0011.00 pointspointsProblems? Adjust creditfor all students. E3-2 Reporting Cash Basis versus Accrual Basis Income LO3-3E3-2 Reporting Cash Basis versus Accrual Basis Income LO3-3Payson Sports, Inc., sells sports equipment to customers. Its fiscal year ends on December 31.The following transactions occurred in the current year:a. Purchased $250,000 of new sports equipment inventory; paid $90,000 in cash and owed therest on account.b. Paid employees $180,300 in wages for work during the year; an additional $3,700 for thecurrent year's wages will be paid in January of the next year.c. Sold sports equipment to customers for $750,000; received $500,000 in cash and owed therest on account. The cost of the equipment was $485,000.d. Paid $17,200 cash for utilities for the year.e. Received $70,000 from customers as deposits on orders of new winter sports equipment tobe sold to the customers in January of the next year.f. Received a $1,930 utilities bill for December of the current year that will be paid in Januaryof the next year.Required: 1.
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