Grouper Corp. maintains its financial records on the cash basis of accounting. Interested in securing a long-term
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Question:
Grouper Corp. maintains its financial records on the cash basis of accounting. Interested in securing a long-term loan from its regular bank, Grouper Corp. requests you as its independent CPA to convert its cash-basis income statement data to the accrual basis.
You are provided with the following summarized data covering 2016, 2017, and 2018.
2016 | 2017 | 2018 | ||||||
Cash receipts from sales: | ||||||||
On 2016 sales | $305,760 | $146,220 | $28,040 | |||||
On 2017 sales | –0– | 342,920 | 96,510 | |||||
On 2018 sales | 405,570 | |||||||
Cash payments for expenses: | ||||||||
On 2016 expenses | 190,320 | 69,070 | 25,610 | |||||
On 2017 expenses | 41,750 | a | 168,780 | 59,460 | ||||
On 2018 expenses | 40,890 | b | 223,550 |
Using the data above, prepare abbreviated income statements for the years 2016 and 2017 on the cash basis.
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