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In: Accounting

On April​ 2, the salaried employees of LaSalle Company receive their paychecks representing 8 workdays in...

On April​ 2, the salaried employees of LaSalle Company receive their paychecks representing 8 workdays in March and 2 days in April for a total gross pay of​ $15,000. Other expenditures paid in April include advertising from March of​ $500 and property taxes for the first quarter of the year of​ $5,700. Property taxes for the second quarter are also expected to be​ $5,700. The​ company's vehicle was repaired on April 1 for an amount of​ $460 to be paid May 1. What are the expenses for April under the cash accounting method and what would they be under accrual basis​ accounting?

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Expert Solution

Answer---------$12,200 under cash accounting and $5,360 under accrual accounting

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Cash accounting Accrual accounting
Salaries paid on april 2 $ 15,000.00 $ 3,000.00
Advertising expense $        500.00 $               -  
Property taxes $    5,700.00 $ 1,900.00
Repair expenses $                 -   $     460.00
Total expenses $ 21,200.00 $ 5,360.00

Only one month's property taxes for april will be recorded in accrual accounting.

Salaries for 2 days will be recorded as expense in april in accrual accounting.

Since repair expense relates to april it will be recorded in april under accrual accounting.

.

In case of cash accounting expense paid in april will be recorded in april.

ekkarill92 answered 1 year ago
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