Read the transactions and fill in the Cash basis/Accrual basis table. Enter expe

Question

Read the transactions and fill in the Cash basis/Accrual basis table. Enter expenses in parentheses or with a negative sign. Enter a 0 if there is nothing to record on a specific date.

Fantastic Catering completed the following selected transactions during May 2016: May 1: Prepaid rent for three months, $1,800 May 5: Received and paid electricity bill, $140 May 9: Received cash for meals served to customers, $2,000 May 14: Paid cash for kitchen equipment, $2,000 May 23: Served a banquet on account, $2,900 May 31:Made the adjusting entry for rent (from May 1). May 31: Accrued salary expense, $1,900 May 31: Recorded depreciation for May on kitchen equipment, $590

Explanation / Answer

As per Accrual basis, expenses and revenues will report when they occured or earned. under cash basis, revenue and expenses will report when cash received or paid.

Cash basis Accrual basis May-01 $    (1,800) $                     - May-05 $        (140) $             (140) May-09 $      2,000 $            2,000 May-14 $    (3,300) $                     - May-23 $               - $            2,900 May-31 $               - $             (600) May-31 $               - $         (1,900) May-31 $               - $             (590) $    (3,240) $            1,670

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