Question: Payson Sports Inc sells sports equipment to customers Its fiscal

Payson Sports, Inc., sells sports equipment to customers. Its fiscal year ends on December 31. The following transactions occurred in 2015:
a. Purchased $250,000 of new sports equipment inventory; paid $90,000 in cash and owed the rest on account.
b. Paid employees $180,300 in wages for work during the year; an additional $3,700 for 2015 wages will be paid in January 2016.
c. Sold sports equipment to customers for $750,000; received $500,000 in cash and the rest on account. The cost of the equipment was $485,000.
d. Paid $17,200 cash for utilities for the year.
e. Received $70,000 from customers as deposits on orders of new winter sports equipment to be sold to the customers in January 2016.
f. Received a $1,930 bill for December 2015 utilities that will be paid in January 2016.

1. Complete the following statements:

2. Which basis of accounting (cash or accrual) provides more useful information to investors, creditors, and other users?Why?

Sale on SolutionInn
  • CreatedJuly 01, 2014
  • Files Included
Post your question