1 Exercise 1-2 (Algo) Accrual accounting [LO1-2) Return to question 7 8 9 4 5 1 2 63 Listed below are several transactions that took place during the second and third years of operations for the RPG Company. Amounts billed to customers for services rendered Cash collected from credit customers Cash disbursements: Payment of rent Salaries paid to employees for services rendered during the year Utilities Advertising Year 2 $260,000 170,000 Year 3 $360,000 310,000 71,000 131,000 21,000 10,500 151,000 $1,000 26,000 Equity In addition, you learn that the company incurred advertising costs of $16,000 in year 2, owed the advertising agency $4,100 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 receivables, 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. Determine the amount due the advertising agency that would be shown as a liability on RPG's balance sheet at the end of year 2 legal, accounting Answer is not complete. Complete this question by entering your answers in the tabs below. The the amount due the advertising agency that would be shown as a liability on RPG's balance sheet at the end of year 2 Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate accrual net income for both years. Revenues Expenses Rent Salaries Year 2 S 260,000 Year 3 $360,000 35,500 35,500 131,000 131,000 Utilities 21,000 31,000 Advertising 10,500 26,000 Net income Required 2 > Equity legal. Return to question Amounts billed to customers for services rendered Cash collected from credit customers Cash disbursements: Payment of rent Salaries paid to employees for services rendered during the year Utilities Advertising Year $360,000 310,000 260,000 170,000 21,000 151,000 21,000 31,000 10,500 26,000 In addition, you learn that the company incurred advertising costs of $16.000 in year 2 owed the advertising agency $4,100 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 receivables, 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. Determine the amount due the advertising agency that would be shown as a liability on RPG's balance sheet at the end of year 2 Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the amount due the advertising agency that would be shown as a liability on RPG's balance sheet at the end of year 2. Advertising liablity at and of Year 2 Panuired 1