Chapter 14

Total Sales 4,000,000
14-1 Less: A/R, ending (1,680,000)

Sales 4,600,000 Accounts written off (120,000)
Accounts receivable-beginning Collections of A/R 2,200,000
1,000,000 Cash sales 500,000
Total Sales 5,600,000 Cash basis 2,700,000
Less: Accounts recievable-ending
(1,300,000)
Collection on credit sales
4,300,000
Advance from customers-ending
300,000 14-5
Less: Advance from customer-beg Prepaid insurance-ending
(200,000) 175,000
Accounts written off Insurance expense
(50,000) 600,000
Cash basis 4,350,000 Total prepaid insurance
775,000
14-2 Prepaid insurance-beginning
Sales 3,000,000 150,000
Accounts receivable-beg. Insurance premium paid
400,000 625,000
Total Sales 3,400,000
Less: Accounts receivable-end. 14-6
485,000 Operating expense per book
Collection on credit sales 3,200,000
2,915,000 Depreciation
Cash sales 200,000 (1,000,000)
Cash basis 3,115,000 Prepaid insurance, beginning
200,000
14-3 Prepaid Insurance, ending
Sales 3,000,000 (150,000)
A/R, beginning 1,000,000 Accrued salaries payable,ending
Total sales 4,000,000 (100,000)
A/R , ending 750,000 Accrued salaries payable, beginning
Sales discount 150,000 120,000
Collections 3,100,000 Cash paid for operating expense
Cash sales, net(2M-100k) 2,270,000
1,900,000
Cash basis 5,000,000 14-7
Cash investment
14-4 200,000
Sales 3,000,000 Service income
A/R, beginning 1,000,000 500,000
Expenses Accounts receivable-ending
(300,000) 1,350,000
Withdrawal (100,000) Sales returns and allowances 200,000
Capital Accounts written off 100,000
300,000 Total Sales 10,150,000
Accounts receivable-beg
14-8 1,200,000
Sales accrual Gross Sales 8,950,000
1,750,000
A/R ending 300,000 14-12
Total 2,050,000 Gross sales 8,950,000
A/R, beginning Less: sales returns (200,000)
500,000 Sales discount (500,000)
Sales Accounts written off (100,000)
1,550,000 Net sales 8,150,000
14-9 Cash payment before discount

Income (cash basis) 5,200,000
6,000,000 Purchase returns 400,000
A/R, ending 4,000,000 A/P, ending 1,850,000
A/P, beginning Gross Purchase 7,450,000
3,000,000 A/P, beginning (1,500,000)
A/R ,beginning Total purchase, current
(2,000,000) 5,950,000
A/P ending (1,500,000)
Income accrual basis Total 5,950,000
9,500,000 Purchase returns (300,000)
Discount (200,000)
Net purchase 5,450,000
4-12
Sales r/a 50,000
Cash sales 500,000
14-10 Collections total 1,840,000
Beginning inventory 2,900,000 Collections of n/r 80,000
Add: Purchase 250,000 Accounts receivable, ending
4,900,000 5,150,000 250,000
TGAS 8,050,000
Less: Ending inventory 2,600,000
COGS 5,450,000 Notes receivable,ending
150,000
14-11 Total 2,870,000
Cash receipt before discount 8,500,000 A/R, beginning
(300,000)
Notes receivable, beginning
(100,000) b. Insurance per book
Gross Sales 72,000
2,470,000 Prepaid before adjustment
3,000
A/P, Dec 31 120,000 Total 75,000
N/P trade Less: Prepaid insurance March 31
Balance,Dec 31 200,000 70,000
Bank loan, Dec.31 (100,000) Insurance expense
100,000 5,000
Payment of A/P
1,500,000 14-16
Purchase discounts Prepaid Insurance (72,000x.50)
20,000 36,000
Payment of N/P Prepaid taxes (24,000x.75)
400,000 18,000
Total 2,140,000 Total prepaid expenses
Trade payable, beginning 54,000
310,000
Purchases on account
1,830,000 14-17
Cash purchases Interest paid 100,000
130,000 Add: Prepaid interest-b 23,500
Gross Purchases Accrued interest-e 53,500
1,960,000 Less Prepaid interest-e (18,000)
Accrued interest-b (45,000)
14-13 Interest expense
Prepaid royalties 114,000
650,000
Year-end 14-18
250,000 Balance per book 990,000
Total 900,000 Accrued 50,000
Total 1,040,000
14-14 Prepaid (60,000)
Prepaid insurance (32,000x.5) Advertising expense 980,000
16,000
Prepaid rent 14-19
20,000 Compensation expense per book
PE, De c 31 490,000
36,000 Add: Accrued salary 18,000
Accrued bonus 175,000
14-15 Compensation expense
a. Prepaid insurance72,000x35/3 683,000
70,000
14-20
Balance per book 820,000
Accrued legal fees
November 60,000
December 70,000 130,000
Total 950,000
14-21
Cash received 8,000,000
Received 280,000
Earned 800,000
Rental revenue 9,080,000
14-22
Royalties received
2,500,000
Royalties receivable-e 800,000
Unearned royalty-b 450,000
Total 3,750,000
Royalties recievable-b 750,000
Unearned royalty-e 650,000
Royalty revenue
2,350,000

Chapter 14

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Total Sales 4,000,000

14-1 Less: A/R, ending (1,680,000)

14-9 Cash payment before discount

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