John's Shoe Store reported revenue of $375,000 in its cash basis
income statement for the year ended December 31, 2018. Additional
information from the books:
| Accounts receivable December 31, 2017 | $50,000 |
| Accounts receivable December 31, 2018 | 75,000 |
| Deposits on custom orders in 2018 | 10,000 |
What would John's Shoe Store's revenue be under the accrual basis
of accounting?
|
Income statement |
||
|
Reported revenue in cash basis |
$375,000 |
|
|
Add: Accounts receivable December 31, 2018 |
$75,000 |
|
|
Less: Accounts receivable December 31, 2017 (It is Last year Revenue but collected this year) |
-$50,000 |
|
|
Less: Deposits on Custom orders in 2018 (It is a Liability not Revenue) |
-$10,000 |
|
|
Reported revenue in Accrual basis |
$390,000 |
John's Shoe Store reported revenue of $375,000 in its cash basis income statement for the year...