Horned Frogs Fine Cooking maintains its books using cash-basis accounting. However, the company recently borrowed $50,000 from

Question:

Horned Frogs Fine Cooking maintains its books using cash-basis accounting. However, the company recently borrowed $50,000 from a local bank, and the bank requires the company to provide annual financial statements prepared using accrual basis accounting as part of the creditworthiness verification. During 2012, the company records the following cash flows:

Horned Frogs Fine Cooking maintains its books using cash-basis accounting.

You are able to determine the following information:
____________________________________January 1, 2012..................December 31, 2012
Accounts Receivable..................................$16,000...........................$12,000
Prepaid Insurance.........................................1,200..............................3,200
Supplies.......................................................-0-..............................1,500
Salaries Payable..........................................3,200..............................2,300
In addition, depreciation on the company's building is $6,000 for the year.
Required:
Prepare an accrual-basis income statement for 2012. (Ignore income taxes.)

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Accounting

ISBN: 9780078110825

2nd Edition

Authors: J. David Spiceland, Wayne Thomas, Don Herrmann

Question Posted: