1) The following data are taken from the cash-basis accounting records of Myerson
Company for the year ended December 31, 2015:
Calculate the amount of revenues and expenses for 2015 under cash-basis accounting.
2) A company maintains its records using cash-basis accounting. During the year, the
company received cash from customers, $34,000, and paid cash for taxes, $24,000. At
the beginning of the year, customers owe the company $3,000. By the end of the year,
customers owe $5,000. At the beginning of the year, the company owes taxes of $4,000.
At the end of the year, the company owes taxes of $5,000. Determine cash-basis net
income and accrual-basis net income for the year.
3) Explain how each of the columns in an amortization schedule is calculated, assuming
the bonds are issued at a discount. How is the amortization schedule different if bonds
are issued at a premium?
4) During its first five years of operations, Della Manufacturing reports net income and
pays dividends as follows. Calculate the balance of retained earnings at the end of each
year. Note that retained earnings will always equal $0 at the beginning of year 1 .
5) Suddenly Salad had the following expenditures related to developing its trademark.
During your year-end review of the accounts related to intangibles, you discover that
the company has capitalized all the above as costs of the trademark. Management
contends that all of the costs increase the value of the trademark; therefore, all the costs
should be capitalized.
1> Which of the above costs should Sams capitalize to the Trademark account in the
balance sheet?
2> Which of the above costs should Sams report as expense in the income statement?
