1.Given the following:
What is accrual-basis expenses?
Select one:
a. $45
b. $63
c. $55
d. $52
e. $37
2.Venice Corp. maintains its accounting records on the cash
basis but restates its financial statements to the accrual method
of accounting. Venice had $120,000 in cash-basis pretax income for
2018. The following information pertains to Venice's operations for
the years ended December 31, 2018 and 2017:
Under the accrual method, what amount of income before taxes should
Venice report on its December 31, 2018 income statement?
Select one:
a. $130,000
b. $110,000
c. $70,000
d. $50,000
e. $190,000
Homework Answers
| 1 | ||
| Cash paid for expenses | 50 | |
| Add: Increase in Accrued expenses | 9 | |
| Less: Increase in prepaid expenses | -7 | |
| Accrual-basis expenses | 52 | |
| Option D $52 is correct | ||
| 2 | ||
| Cash-basis pretax income | 120000 | |
| Add: Increase in Accounts Receivable | 40000 | =80000-40000 |
| Add: Decrease in Accounts Payable | 30000 | =60000-30000 |
| Accrual method income before taxes | 190000 | |
| Option E $190,000 is correct |
Add Answer to:
1.Given the following:
What is accrual-basis expenses?
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Margaret Moore, M.D., maintains the accounting records of Moore
Clinic on a cash basis. During 2020, Dr. Moore collected $132,258
from her patients and paid $50,809 in expenses. At January 1, 2020,
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(All long-lived assets are rented.)
January 1, 2020
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Accounts receivable
$9,283
$17,324
Unearned service revenue
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1,957
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1,905
3,397
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