Homework 2 accounting

Homework 2 accounting - E316. Req. 1 (a) (b) Brief...

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E3–16. Req. 1 Brief Explanation (a) Issued capital stock to shareholders for $62,000 cash. (b) Purchased store fixtures for $12,400 cash. (c) Purchased $24,800 of inventory, paying $6,200 cash and the balance on account. (d) Sold $12,400 of goods or services to customers, receiving $8,680 cash and the bal- ance on account. The cost of the goods sold was $3,720. (e) Paid $2,480 in cash for rent, $620 related to the current month and $1,860 related to future months. (f) Paid $1,240 in wages to employees. (g) Used $1,480 of utilities during the month, not yet paid. (h) Received $3,720 cash from customers, $1,240 related to current sales and $2,480 re- lated to goods or services to be provided in the future. Req. 2 Katie’s Kite Company Income Statement For the Month Ended April 30, 2010 Sales Revenue Expenses: 13,640 Expenses: Cost of sales: 3,720 Wages expense: 1,240 Rent expense: 620 Utilities expense: 1,480 Total expenses: 7,060 Net Income: 6,580 Req. 3 Katie’s Kite Company Balance Sheet
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For the Month Ended April 30, 2010 Assets Liabilities Current As- sets Current Liab- ilities Cash 52,080 Accounts Payable 20,080 Accounts receiv- able 3,720 Unearned Revenue 2,480 Inventory 21,080 Total current liabil- ities 22,560 Prepaid expenses 1,860 Shareholders’ Equity Total current assets 78,740 Contributed Capital 62,000 Store fixtures 12,400 Retained Earnings 6,580 Total shareholders’ equity 68,580 Total Assets 91,140 Total Liabil- ities & Share- holders’ Equity 91,140
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Homework #2 July 22nd 2010 Christina Qinxin Yang SID 20341272 E3-10
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Req. 3 Net income using the accrual basis of accounting: Revenue 17,760 (17,400+360) -Expense 12,420 (12,000+420) Net Income 5,340 (Accrual basis) Req. 4 Net income using the cash basis of accounting: Cash receipts 25,560 (transactions a through d) Cash disbursements 15,000 (transactions g, i, and k) Net Income (Cash basis) Cash basis net income ($10,560) is higher than accrual basis net income ($5340) due to the dif-
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This note was uploaded on 12/01/2010 for the course UGBA 102A taught by Professor Udpa during the Summer '07 term at Berkeley.

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Homework 2 accounting - E316. Req. 1 (a) (b) Brief...

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