Question

ework 。 Listed below are several transactions that took place during the second and third years of operations for RPG Company Amounts billed to customers for services rendered Cash collected fron credit cus Cash disbursements: Paymont of rent Salaries paid to employees for servi during the year Travel and entertainment Advertising $350,000 $450, 000 260,000 400,000 tomera 80,000 140,000160,000 30,000 40,000 15,000 35,000 In addition, you learn that the company incurred advertising costs of $25,000 in year 2, owed the advertising agency $5,000 at the end of year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated bad debts on recelvables, and the rent payment was for a two-year period, year 2 and year 3 Required: 1. Calculate accrual net income for both years. 2 Det ing agency that would be shown as a leblity on RPG's balance shet at the end of year 2 ermine the amount due the advertis Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate accrual net income for both years. Rent Salaries Prev 10( 7H1 Net >

Answer 1

1 Calculation of net income for both years Year 2 Year 3 Revenue 350000 450000 teit Salaries Travel and entertainment Advertisement 4000040000 140000 160000 41(XX) 20000 190000 30000 25000 115000 Net Income 2 Advertising liability at the end of year 2 15000 (5000+25000-15000)