GHI Travel Services arranges tours and travel packages. Financial transactions for 2023 are summarized below: Transactions (in
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Question:
GHI Travel Services arranges tours and travel packages. Financial transactions for 2023 are summarized below:
Transactions (in $ millions) | Amount |
Cash Receipts | 75.0 |
Credit Sales | 30.0 |
Cash Payments | 50.0 |
Accounts Receivable | 25.0 |
Advertising Expenses | 20.0 |
Estimated Cancellations Refunds | 6.0 |
Requirements:
- Prepare GHI Travel Services' income statement for 2023 using the modified cash basis.
- Calculate net income considering the conservatism principle.
- Discuss the impact of estimated cancellations refunds on financial statements.
- Analyze the treatment of accounts receivable and advertising expenses under the conservatism principle.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: