Question

In the course of your examination of the book and records of Gardner Company for the year ending December 31, 2011, you find the following data.
Salaries earned by employees .................$45,000
Salaries paid to employees .................. 42,000
Total sales revenue .................... 800,000
Cash collected from sales .................. 780,000
Utilities expense incurred .................... 4,600
Utilities bills paid .................... 4,300
Cost of Goods sold .................... 475,000
Cash paid on inventory purchases in 2011 ............467,500
Inventory at December 31, 2011...................... 286,400
Tax assessment for 2011.................... 4,000
Taxes paid in 2011 ...................... 3,600
Rent expense for 2011 ...................25,500
Rent paid in 2011 ...................... 23,500

Required:
Compute Gardner Company’s net income for 2011 in a good form
(a) Using accrual basis.
(b) Using cash basis accounting.



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  • CreatedJuly 26, 2013
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