Reference no: EM132676889

Question - Evaluate the items below and determine the correct amount to report on income statement for each using the accrual basis of accounting.

Revenues A Company had beginning accounts receivable of $8,000. The company reported cash basis revenues of $100,000. The ending accounts receivable amounted to $18,000.

Supplies Expense B Company began the year with no supplies on hand. During the year, B Company purchased $25,000 of supplies. Supplies on hand at year end were $20,000. Rent Expense C Company started the year with no prepaid rent, and ended the year with $1,000 in prepaid rent.

Rent expense on a cash basis was $13,000. Equipment/Depreciation expense At the beginning of the year, D Company purchased and expensed an item of equipment for $20,000 under the cash basis of accounting. The equipment has a 4-year life and will be worthless after four years.

Wages Expense There were no wages payable at the beginning of the year. E Company paid $145,000 in wages during the year and owed an additional $12,000 at year's end.