Dannon Co. reported its expenses of $35,200 on the cash basis. Corporate records revealed the following information: Beginning prepaid expense $1,300 Beginning accrued expense 1,650 Ending prepaid expense 1,800 Ending accrued expense 1,200 What amount of expense should the Dannon report on its books under the accrual basis?

Question

Jaron Holland

Business

1 July, 07:28

Dannon Co. reported its expenses of $35,200 on the cash basis. Corporate records revealed the following information: Beginning prepaid expense $1,300 Beginning accrued expense 1,650 Ending prepaid expense 1,800 Ending accrued expense 1,200 What amount of expense should the Dannon report on its books under the accrual basis?

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Ryan Shaffer · Answer 1

The computation of expense amount is shown below:

= Expenses - adjusted prepaid expense + adjusted accrued expense

= $35,200 - $500 - $450

= $34,250

The adjusted prepaid expense is computed by

= Ending balance of prepaid expense - beginning balance of prepaid expense

= $1,800 - $1,300

= $500

And, the The adjusted accrued expense is computed by

= Ending balance of accrued expense - beginning balance of accrued expense

= $1,200 - $1,650

= - $450