Question
In: Accounting
Listed below are several transactions that took place during the first two years of operations for...
Listed below are several transactions that took place during the
first two years of operations for the law firm of Pete, Pete, and
Roy.
| Year 1 | Year 2 | |||||
| Amounts billed to clients for services rendered | $ | 184,000 | $ | 234,000 | ||
| Cash collected from clients | 167,000 | 197,000 | ||||
| Cash disbursements | ||||||
| Salaries paid to employees for services rendered during the year | 97,000 | 107,000 | ||||
| Utilities | 33,500 | 47,000 | ||||
| Purchase of insurance policy | 62,100 | 0 | ||||
In addition, you learn that the company incurred utility costs of
$38,500 in year 1, that there were no liabilities at the end of
year 2, no anticipated bad debts on receivables, and that the
insurance policy covers a three-year period.
Required:
1. & 3. Calculate the net
operating cash flow for years 1 and 2 and determine the amount of
receivables from clients that the company would show in its year 1
and year 2 balance sheets prepared according to the accrual
accounting model.
2. Prepare an income statement for each year
according to the accrual accounting model.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Listed below are several transactions that took place during the first two years of operations for...
Listed below are several transactions that took place during the
first two years of operations for the law firm of Pete, Pete, and
Roy.
Year 1
Year 2
Amounts billed to clients for services rendered
$
184,000
$
234,000
Cash collected from clients
167,000
197,000
Cash disbursements
Salaries paid to employees for services rendered during the
year
97,000
107,000
Utilities
33,500
47,000
Purchase of insurance policy
62,100
0
In addition, you learn that the company incurred utility costs of
$38,500...
Listed below are several transactions that took place during the second and third years of operations...
Listed below are several transactions that took place during the
second and third years of operations for RPG Company.
Year 2
Year 3
Amounts billed to customers for
services rendered
$
290,000
$
390,000
Cash collected from credit
customers
200,000
340,000
Cash disbursements:
Payment of rent
74,000
0
Salaries paid to employees for
services rendered during the year
134,000
154,000
Travel and entertainment
24,000
34,000
Advertising
12,000
29,000
In addition, you learn that the company incurred advertising costs
of $19,000...
Listed below are several transactions that took place during the second and third years of operations...
Listed below are several transactions that took place during the
second and third years of operations for the RPG Company.
Year 2
Year 3
Amounts billed to customers for services rendered
$
270,000
$
370,000
Cash collected from credit customers
180,000
320,000
Cash disbursements:
Payment of rent
72,000
0
Salaries paid to employees for services rendered during the
year
132,000
152,000
Utilities
22,000
32,000
Advertising
11,000
27,000
In addition, you learn that the company incurred advertising costs
of $17,000 in...
Listed below are several transactions that took place during the second and third years of operations...
Listed below are several transactions that took place during the
second and third years of operations for RPG Company. Year 2 Year 3
Amounts billed to customers for services rendered $ 370,000 $
470,000 Cash collected from credit customers 280,000 420,000 Cash
disbursements: Payment of rent 82,000 0 Salaries paid to employees
for services rendered during the year 142,000 162,000 Travel and
entertainment 32,000 42,000 Advertising 16,000 37,000 In addition,
you learn that the company incurred advertising costs of $27,000...
Listed below are several transactions that took place during the second and third years of operations...
Listed below are several transactions that took place during the
second and third years of operations for RPG Company.
Year 2 Year 3
Amounts billed to customers for services rendered $400,000
$500,000
Cash collected from credit customers 310,000 450,000
Cash disbursements:
Payment of rent 85,000 0
Salaries paid to employees for services rendered during the year
145,000 165,000
Travel and entertainment 35,000 45,000
Advertising 17,500 40,000
In addition, you learn that the company incurred advertising
costs of $30,000 in year...
Exercise 1-2 Accrual accounting [LO1-2] Listed below are several transactions that took place during the second...
Exercise 1-2 Accrual accounting [LO1-2]
Listed below are several transactions that took place during the
second and third years of operations for RPG Company.
Year 2
Year 3
Amounts billed to customers for
services rendered
$
450,000
$
550,000
Cash collected from credit
customers
360,000
500,000
Cash disbursements:
Payment of rent
90,000
0
Salaries paid to employees for
services rendered during the year
150,000
170,000
Travel and entertainment
40,000
50,000
Advertising
20,000
45,000
In addition, you learn that the company...
The following list summarizes the transactions that took place during a start up’s secondyear of operations....
The following list summarizes the transactions that took place
during a start up’s secondyear of operations. Using the information
below(and assuming FIFO for inventory), prepare a list of the
appropriate journal entries, including any necessary adjusting
entries, and create a set of financial statements(i.e., balance
sheet, income statement, and statement of cash flows).Once you have
created the financial statements, provide the appropriate closing
entries.Recall that there were 150 units of inventory,which had
been purchased at $10 per unit, left at...
The following events took place for Focault Inc. during July 20Y2, the first month of operations...
The following events took place for Focault Inc. during July
20Y2, the first month of operations as a producer of road bikes: •
Purchased $404,710 of materials • Used $344,090 of direct materials
in production • Incurred $298,900 of direct labor wages • Applied
factory overhead at a rate of 78% of direct labor cost •
Transferred $814,310 of work in process to finished goods • Sold
goods with a cost of $781,480 • Sold goods for $1,396,720 •
Incurred...
The following events took place for Rushmore Biking Inc. during February, the first month of operations...
The following events took place for Rushmore Biking Inc. during
February, the first month of operations as a producer of road
bikes:
Purchased $300,000 of materials.
Used $271,600 of direct materials in production.
Incurred $78,100 of direct labor wages.
Applied factory overhead at a rate of 46% of direct labor
cost.
Transferred $365,700 of work in process to finished goods.
Sold goods with a cost of $348,000.
Revenues earned by selling bikes, $575,800.
Incurred $117,100 of selling expenses.
Incurred $56,900...
Kochi Service was formed on May 1,2020. The following transactions took place during the first month...
Kochi Service was formed on May 1,2020. The following
transactions took place during the first month (amounts in
thousands)
Transactions on May 1:
Rahul Shah invested ₤40,000 cash in the company in exchange for
ordinary shares.
Hired two employees to work in the warehouse. They will each
paid a salary of ₤3,050 per month.
Signed a 2-year rental agreement on a warehouse; paid ₤24,000
cash in advance for the first year
Purchase furniture and equipment costing ₤30,000. A cash
payment...
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