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    scothypnotist's Avatar
    scothypnotist Posts: 1, Reputation: 1
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    #1

    Feb 16, 2010, 01:32 PM
    calculate net earnings formula
    The income statement for the Edgebrook Golf Club Inc. for the month ended July 31
    shows Green Fees Revenue $16,000; Salaries Expense $8,400; Maintenance Expense $2,500;
    and Income Tax Expense $1,000. The statement of retained earnings shows an opening balance for
    Retained Earnings of $20,000 and Dividends $1,000.

    What is the retained earnings?

    ==============================================


    In its first year of operations, Cope Company earned $28,000 in service revenue,
    $6,000 of which was on account and still outstanding at year-end. The remaining
    $22,000 was received in cash from customers.
    The company incurred operating expenses of $15,500.
    Of these expenses $13,000 were paid in cash; $2,500 was still owed on account
    at year-end. In addition, Cope prepaid $2,600 for insurance coverage that would
    not be used until the second year of operations.

    (a)Calculate the first year's net earnings under the cash basis of accounting,
    and calculate the first year's net earnings under the accrual basis of accounting.


    ?-Cash Basis $
    ?-Accrual Basis $
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Feb 19, 2010, 12:10 AM

    This should have been posted over in the homework forum. But either way, you need to read the guidelines for posting homework:
    https://www.askmehelpdesk.com/financ...-b-u-font.html
    locsushi's Avatar
    locsushi Posts: 1, Reputation: 1
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    #3

    Oct 20, 2011, 09:34 AM
    cash basic = 22,000 - 13,000 - 2,600 = 6,400
    accrual basic = 28,000 - 15,500 = 12,500
    Accrual Basic provide more useful information

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