Question: Please help me with this problem. Thank you so much! You were assigned to reconstruct the financial statements of Bob Corporation in application for a
Please help me with this problem. Thank you so much!


You were assigned to reconstruct the financial statements of Bob Corporation in application for a bank loan. Bob Corporation maintains its accounting records under the cash basis of accounting. The following were discovered in line with your investigations: A. Summary of cash transactions were as follows: CASH RECEIPTS Cash sales Collections on accounts receivable, including recovery of previously written-off accounts 3,550,000 28,950,00 0 Collections on trade notes receivables Interest on notes receivable Purchase returns and allowances 2,980,000 260,000 420,000 CASH DISBURSEMENTS Cash purchases Payments on accounts payable Sales returns and allowances Insurance Salaries Equipment Other expenses Dividends 2,350,000 17,590,000 390,000 700,000 10,000,000 800,000 1,500,000 1,000,000 B. The following changes in account balances would have been observed had accrual basis been used: INCREASES Cash 4,200,000 1,980,000 111,000 Accounts receivable Allowance for bad debts Accounts payable Prepaid insurnce Advances to suppliers 970,000 200,000 255,000 DECREASES Interest receivable 60,000 Equioment Trade notes receivable 100,000 600,000 300,000 875,000 Accrued salaries expense Inventory C. Additional information: - Total purchase returns and allowances amounted to $950,000 (including the refunded portion) while total sales returns and allowances amounted to $1,280,000 (including refunded portion) - Accounts receivable written-off during the year was at $315,000 while recovery of previous write off was at $150,000 Based on the following information above, answer the following questions: 1. How much is the net sales under the accrual basis of accounting? 2. How much is the cost of sales under the accrual basis of accounting? 3. How much is the depreciation expense under the accrual basis of accounting? 4. How much is the provision for doubtful accounts under the accrual basis of accounting? 5. How much is the net income under the accrual basis of accounting
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