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    Minutemen Law Services Maintains Its Books Using Cash Basis Accounting However

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    trilocksp Singh
    Minutemen Law Services normally uses cash-basis accounting but needs to provide financial statements using accrual-basis accounting to obtain a bank loan. The company collected $60,000 in cash from customers in 2012 but spent $50,000 on expenses. While cash increased by $10,000, accounts receivable rose by $2,000 and prepaid insurance was $3,200, so net income was higher when calculated using accrual accounting. Depreciation was $8,000 for the year.

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    Minutemen Law Services Maintains Its Books Using Cash Basis Accounting However

    Uploaded by

    trilocksp Singh
    67 views1 page
    Minutemen Law Services normally uses cash-basis accounting but needs to provide financial statements using accrual-basis accounting to obtain a bank loan. The company collected $60,000 in cash from customers in 2012 but spent $50,000 on expenses. While cash increased by $10,000, accounts receivable rose by $2,000 and prepaid insurance was $3,200, so net income was higher when calculated using accrual accounting. Depreciation was $8,000 for the year.

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    Minutemen Law Services normally uses cash-basis accounting but needs to provide financial statements using accrual-basis accounting to obtain a bank loan. The company collected $60,000 in cash from customers in 2012 but spent $50,000 on expenses. While cash increased by $10,000, accounts receivable rose by $2,000 and prepaid insurance was $3,200, so net income was higher when calculated using accrual accounting. Depreciation was $8,000 for the year.

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    © All Rights Reserved
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    67 views1 page

    Minutemen Law Services Maintains Its Books Using Cash Basis Accounting However

    Uploaded by

    trilocksp Singh
    Minutemen Law Services normally uses cash-basis accounting but needs to provide financial statements using accrual-basis accounting to obtain a bank loan. The company collected $60,000 in cash from customers in 2012 but spent $50,000 on expenses. While cash increased by $10,000, accounts receivable rose by $2,000 and prepaid insurance was $3,200, so net income was higher when calculated using accrual accounting. Depreciation was $8,000 for the year.

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    Minutemen Law Services maintains its books using cash

    basis accounting However


    Minutemen Law Services maintains its books using cash-basis accounting. However, the
    company decides to borrow $100,000 from a local bank, and the bank requires Minutemen 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:Cash
    collected from customers .....................................$60,000Cash paid for:Salaries
    ................................$35,000Supplies .................................3,000Rent
    .....................................4,000Insurance ...............................6,000Utilities
    .................................2,000 .......................50,000Net cash flows
    ......................................................$10,000You are able to determine the following
    information:................................................January 1, 2012 ...............December 31,
    2012Accounts Receivable .......................$20,000 ...............................$22,000Prepaid Insurance
    ..............................-0- ....................................3,200Supplies .......................................4,000
    ..................................1,500Salaries Payable ..............................2,200
    ..................................3,400In addition, depreciation on the company's equipment is $8,000 for
    the year.Required:Prepare an accrual-basis income statement for the year ended December 31,
    2012? (Ignore income taxes.)View Solution: Minutemen Law Services maintains its books using
    cash basis accounting However
    SOLUTION-- http://solutiondone.online/downloads/minutemen-law-services-maintains-its-books-
    using-cash-basis-accounting-however/

    Unlock answers here solutiondone.online

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