Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 2 : (There are 3 Part of this question) Cash versus Accrual Basis of Accounting At the end of the first year of operations,

Question 2 : (There are 3 Part of this question)

Cash versus Accrual Basis of Accounting

At the end of the first year of operations, Jeremy Pereira, owner of Jubilee Designs, engaged you to prepare yearly financial statements for the year ended 30 June 2020, on both the cash basis and the accrual basis. The following data are a summary of selected transactions that occurred during the year. Ignore GST.

1.Fees of $325,000 were collected for services provided during the year.

2.There were $8,000 in accounts receivable at 30 June 2019 for services performed during June on credit.

3.Cash paid for salaries, rent, insurance and other expenses $195,000 during the year.

4.Salaries accrued for last fortnight of June $10,000, but not yet paid.

5.On 25 June 2020, a client paid $3,000 in advance for services to be rendered during July 2020.

6.Expenses of $9,000 were paid in advance for next financial year (not included in the above $195,000) at 30 June.

image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Computer Accounting

Authors: Donna Kay

15th Edition

0077826841, 9780077826840

More Books

Students also viewed these Accounting questions