E4-1B_Cash basis to accrual basis accounting

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Description

E4-1B
Your examination of the records of a company that follows the cash basis of accounting
tells you that the company’s reported cash basis earnings in 2010 are $33,640.
If this firm had followed accrual basis accounting practices, it would have
reported the following year-end balances.

2010 2009

Accounts
receivable $3,400 $2,300

Supplies
on hand 1,400
1,160

Unpaid
wages owed 1,500 2,400

Other
unpaid amounts 1,300 1,600

Instructions

Determine the company’s net earnings on an accrual basis
for 2010. Show all your calculations in an orderly fashion.

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