Thursday
April 17, 2014

Homework Help: account

Posted by ifi on Monday, March 25, 2013 at 12:28am.

For both cases, show what each firm would report in its annual statement of profit and loss and other comprehensive income under the:
a)Cash Basis
b)Accrual Basis

CASE 1
During 2012 Gangnam Marketing earned revenues of $500,000 on account. Gangnam collected $510,000 from the customers during the year. Expenses totaled $420,000 and the related cash payments were $400,000.

CASE 2
Bella Foods made sales of $700,000 during 2012. Out of this amount Bella collected cash for all but $30,000. Operating expenses for the year amounted to $650,000. However, during the year, Bella paid $650,000 for the expenses, which include $30,000 advance rental.

*actually i don't know what the question need, does it need in journal/account/income statement? can someone show me how to do it and the final answer should be what?

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