Ask Question
1 September, 21:28

Dannon Co. mistakenly reported its expenses of $35,200 on the cash basis. Corporate records revealed the following information:Beginning prepaid expense $1,300Beginning accrued expense 1,650Ending prepaid expense 1,800Ending accrued expense 1,200What amount of expense should Dannon report on its books under the accrual basis? a. $34,250b. $35,150c. $35,300d. $36,150

+5
Answers (1)
  1. 1 September, 21:41
    0
    amount of expense report = 34,250

    so correct option is a. $34,250

    Explanation:

    given data

    expenses on cash basis = $35,200

    Beginning prepaid expense = $1,300

    Beginning accrued expense = 1,650

    Ending prepaid expense = 1,800

    Ending accrued expense = 1,200

    to find out

    amount of expense report on books under accrual basis

    solution

    we know that accrual basis reflect expenses incurred during the period while cash basis reflect expenses actually paid during the year in cash

    so

    Expense on Cash basis is $35,200

    and

    Increase in prepaid expenses = expenses paid for next period

    = $1800 - $1300 = $500

    and

    Decrease in Accrued Expenses = expenses paid of earlier period

    = $1650 - $1200 = $450

    so

    amount of expense report on books under accrual basis is

    amount of expense report = 35,200 - 500 - 450

    amount of expense report = 34,250

    so correct option is a. $34,250
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Dannon Co. mistakenly reported its expenses of $35,200 on the cash basis. Corporate records revealed the following information:Beginning ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers