The following transactions for Carleton Company occurred during January 2016: Ja

Question

The following transactions for Carleton Company occurred during January 2016: Jan. 1 Purchased a two-year insurance policy for cash, $8,400 4 Paid utilities bill received December 2015, $450 9 Performed a service on account, $1,200 16 Paid bimonthly salary to employees, $2,700 21 Received $800 from a customer on account 25 Received $600 from January 9 transaction 30 Prepared the adjusting entry for insurance from January 1 transaction 30 Accrued wages of $2,750 Required: Show the total amount of revenue and expense recognized under both the accrual basis and cash basis of accounting. Accrual Basis Revenue Total Expense Total Cash Basis Revenue Total Expense Total

Explanation / Answer

Date Particulars Accrual Basis Revenue Expenses Cash Basis Revenue Jan.1 Purchased a two-year insurance policy for cash $8400 Jan.4 Paid utilities bill received December 2015 $450 Jan.9 Performed a service on account $1200 Jan.16 Paid bimonthly salary to employees $2700 Jan.21 Received $800 from a customer on account $800 Jan.25 Received $600 from January 9 transaction Jan.30 Prepared the adjusting entry for insurance from January 1 $4200 $4200 Jan.30 Accrued wages of $2,750 $2750 Total $9600 $10100 $5000

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