Reference no: EM132569807

Question 1: A Company provided you the following information for the current year: Gross cash sales ?500,000 Trade Accounts Receivable - Beginning Balance 600,000 Trade Accounts Receivable - Ending Balance 400,000 Increase in Trade Notes Receivable 300,000 Collections on trade receivables 1,000,000 Sales Returns and Discounts (inclusive of ?5,000 payments to customers) 20,000 Written off Accounts Receivable 10,000 Recoveries of Accounts Receivable written off (included in collections) 4,000 Discounted Trade Notes Receivable (Notes Receivable was directly credited) 30,000

Requirements:

1. Net sales under cash basis method of accounting.

2. Net sales under accrual basis method of accounting.

3.Journal Entries

Question 2: Company provided you the following information for the current year: Gross cash purchases ?300,000 Trade Accounts Payable - Beginning Balance 500,000 Trade Accounts Payable - Ending Balance 400,000 Decrease in Notes Payable 200,000 Cash payments on Trade Payables 1,000,000 Purchase Returns and Discounts (inclusive of ?15,000 receipts from suppliers) 20,000 Increase in Inventories 100,000

Requirements:

1. Net purchases and COS under cash basis method of accounting.

2. Net purchases and COS under accrual basis method of accounting.

3.Journal entry