Question

The following data are taken from the cash-basis accounting records of Myerson Company for the year ended December 31, 2021: Selected Data as of December 31, 2021 Customers billed in 2021 for services provided $ 420,000 Cash collections in 2021 for accounts billed in 2020 30,000 Cash collections in 2021 for accounts billed in 2021 250,000 Cash paid for supplies purchased in 2021 19,000 Supplies remaining at the end of 2021 2,300 Cash paid for salaries in 2021 11,000 Cash paid for annual rent on March 1, 2021 23,000 Calculate the amount of revenues and expenses for 2021 under accrual-basis accounting. (Round your final answers to the nearest whole dollar.)

Answer 1

Answer:

The amount of revenues and expenses for 2021 under accrual-basis accounting is $420,000 and $46,867 respectively

Explanation:

The computation of the amount of revenues and expenses for 2021 under accrual-basis accounting is shown below:

Revenues =  Customers billed in 2021 for services provided

                 = $420,000

And, expenses equals to

= Supplies expense+ salaries expense + rent expense

where,

Supplies expense = Cash paid for supplies purchased in 2021 - Supplies remaining at the end of 2021

= $19,000 - $2,300

= $16,700

Salaries expense = $11,000

And the rent expense = Annual rent × (number of months ÷ total number of months in a year)

= $23,000 × (10 months ÷ 12 months)

= $19,167

Now put these values to the above formula  

So, the value would equal to

= $16,700 + $11,000 + $19,167

= $46,867