Explore BrainMass

Explore BrainMass

    Cash conversion to accrual

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    I am confused as to where to start with this problem. Any help would be greatly appreciated.

    Your examination of a company's records that follows the cash basis of accounting reveals that the company's reported cash basis earnings in 2006 are $ 33,640. If the firm had followed accrual basis accounting practices, it would have reported the following year end balances.

    2006 2005

    ACCOUNTS RECEIVABLE $ 3400. $ 2300.
    SUPPLIES ON HAND 1300 1160
    UNPAID WAGES 1500 2400

    Determine the company's net earnings on an accrual basis for 2006. Show calculations.

    © BrainMass Inc. brainmass.com March 4, 2021, 8:13 pm ad1c9bdddf


    Solution Preview

    The best way to complete this problem is to make the journal entries ...

    Solution Summary

    The problem discusses the process necessary to make the conversion from cash to accrual net income for 2006.