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Your examination of the records of a company that follows the cash basis of accounting
tells you that the company"s reported cash basis earnings in 2012 are $33,640. If this firm had followed accrual basis accounting practices, it would have reported the following year-end balances.
2012
2011
Accounts receivable
$3,400
$2,800
Supplies on hand
1,300
1,460
Unpaid wages owed
2,000
2,400
Other unpaid amounts
1,400
1,100
Instructions
Determine the company's net earnings on an accrual basis for 2012. Show all your calculations in an orderly fashion.
Tax Law complexity - Tax law is determined by Congress (Not the IRS). The IRS only enforces the law Congress makes. However, it's widely known that many Congressman find the tax law to complex and have a CPA prepare their taxes.
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On April 1, 2014, West Company purchased $476,000 of 5.25% bonds for $494,790 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2019.
Under a three-variance breakdown of the net overhead variance, evaluate the total factory overhead spending variance for May.
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