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Pina Colada Corp. maintains its financial records using the cash basis of accounting. As it would like to secure a long-termUsing the information above, prepare abbreviated income statements for the years 2018 and 2019 using the accrual basis of acc

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Answer #1

Expense under cash basis 2018 :

2018 2019
165,860 60,070
35,875 121,181
41,675
$201,735 $222,926

Sales under cash basis for 2019 = 143,500+374,000

= $517,500

Pina Colada Corp.
Income Statement ( Cash Basis)
2018 2019
Sales 287,000 517,500
Expenses -201,735 -222,926
Net Income/Loss $85,265 $294,574

Expense under accrual basis 2018 :

2018 2019
165,860 35,875
60,070 121,181
22,600 52,875
$248,530 $209,931

Sales under accrual basis 2018 :

2018 2019
287,000 374,000
143,500 81,000
27,000 0
$457,500 $455,000
Pina Colada Corp.
Income Statement ( Accrual Basis)
2018 2019
Sales 457,500 455,000
Expenses -248,530 -209,931
Net Income/Loss $208,970 $245,069

Kindly comment if you need further assistance.

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