Vidgam a consulting firm has just completed its first year

Assignment Help Accounting Basics

Reference no: EM13586523

VidGam, a consulting firm, has just completed its first year of operations. The company sales growth was explosive. To encourage clients to hire its services, VidGam offered 180-day financingmeaning its largest customers do not pay for nearly 6 months. Because VidGam is a new company, its equipment suppliers insist on being paid cash on delivery. Also, it had to pay up front for 2 years of insurance. At the end of the year, VidGam owed employees for one full month of salaries, but due to a cash shortfall, it promised to pay them the first week of next year.

Explain how cash and accrual accounting would differ for each of the events listed above and describe the proper accrual accounting.

Assume that at the end of the year, Vidgam reported a favorable net income, yet the company's management is concerned because the company is very short of cash. Explain how Vidgam could have positive net income and yet run out of cash.

Reference no: EM13586523

Questions Cloud

Gary and gerdy gray purchased a home for 125000 on : gary and gerdy gray purchased a home for 125000 on september 15 2010. on october 7 2011 they were divorced and as part

Though the statement quoted above may by disputed most : though the statement quoted above may by disputed most physicists do have a feeling that the great laws of physics are

If appreciated property is contributed to a partnership in : if appreciated property is contributed to a partnership in exchange for a partnershipinterest what basis will the

Science like any knowledge can be put to good or bad use : science like any knowledge can be put to good or bad use depending on the user. given below are some of the

Vidgam a consulting firm has just completed its first year : vidgam a consulting firm has just completed its first year of operations. the company sales growth was explosive. to

Mgco3 plus 2hcl plus mgcl2 plus h2 h20 plus co2 if 10 : mgco3 plus 2hcl plus mgcl2 plus h2 h20 plus co2 if 10 games of c02 is produced calculate the mass of magnesium and

Mark mayer a cash basis taxpayer leased property on june 1 : mark mayer a cash basis taxpayer leased property on june 1 2012 to perry purly at 325 a month. perry paid mark 325 as a

Analyze and critically appraise evidence-based literature : choose a nursing problem from your current practice setting and identify a possible solution to that problem.conduct a

How will you use your knowledge of science to develop : india has had a long and unbroken tradition of great scholarship in mathematics astronomy linguistics logic and ethics.

User Account

All Pages