Tastee inc sells kitchen wares to customers using the cash


Problem - Tastee, Inc., sells kitchen wares to customers. Its fiscal year ends this month. The following transactions occurred this year:

  • Sold kitchen wares to customers for $272,000; received $100,000 in cash and the rest on account. The cost of the equipment was $47,000.
  • Paid employees $65,260 in wages for work during the year; an additional $6,130 for current year wages will be paid at the end of the first week of next month.
  • Purchased $147,000 of new kitchen wares inventory; paid $42,000 in cash and owed the rest on account.
  • Received $1,281 from customers as deposits on orders of new kitchen wares to be delivered to the customers next year.
  • Paid $36 cash for utilities for this year. $2,480 in utility bills for this year remain unpaid.

Using the cash basis of accounting, what would Tastee, Inc report as current year income?

Solution Preview :

Prepared by a verified Expert
Accounting Basics: Tastee inc sells kitchen wares to customers using the cash
Reference No:- TGS02531369

Now Priced at $25 (50% Discount)

Recommended (97%)

Rated (4.9/5)