Under the cash basis of accounting, a firm recognizes revenues from selling goods and providing Services in the period when it receives cash from customers. It reports (19) in the period when it makes cash expenditures for merchandise, salaries, insurance, taxes, and (20) items. To illustrate the measurement of performance under the cash basis of accounting, consider the following example.Donald and Joanne Allens open a hardware store on January 1, Year 1. The firm receives $20,000 (21) cash from the Aliens and borrows $12,000 from a local bank. It must repay the loan on June 30, Year 1, with interest charged (22) the rate of 12 percent per year. The firm rents a store building on January 1, and pays 2 months’ rent of $4,000 (23) . On January 1, it also pays the premium of $ 2,400 for property and liability insurance coverage for the year (24) December 31, Year 1. During January it acquires merchandise costing $40,000, (25) it purchases $26,000 for cash and $ 14,000 on account. Sales to customers during January total $50,000, of which $34,000 is for (26) and $16,000 is on account. The acquisition cost of the merchandise (27) during January is $32,000,and various employees receive $5,000 in salaries.Lawyers, accountants, and (28) professionals are the principal entities that use the cash basis of ac counting. These professionals have (29) small investments in multiperiod assets, (30) buildings and equipment, and usually collect cash from clients soon after they (31) services. Most of these firms actually use a modified cash basis of accounting, under which they (32) the costs of buildings, equipment, and similar items as assets (33) .Most individuals use the cash basis of accounting for the purpose of computing personal income and person al income taxes. 30()
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1 The Pan-American will have a luncheon meeting this coming (5) , professor Miguel Lopez will make a speech at (6) .2 The admission fee is $ (7) per person, and the speech will probably end at (8) o’clock 5()
Interview InformationThe interviewer asked interviewee some information about her family and family size, etc.1 Her husband works in a factory, earning $ (1) a month.2 She has (2) children, (3) boys and one girl.3 The oldest boy is (4) the youngest daughter is four and a half. 3()
AThe Santa Cruz Operation Incorporate (SCO), a US-based software developer, opened a representative office in Beijing yesterday.Founded in 1979, SCO has become the world’s leading developer and supplier of software for UNIX systems. The new office in Beijing will bring SCO closer to Chinese customers and help it understand the massive Chinese market better, said Lars Turndal, SCO’S president and chief executive officer. SCO will mainly target government, departments, key industries and service institutions.BUS computer giant International Business Machines (IBM) last week announced that it will invest at least $100 million in information technology projects in China. This makes IBM the first foreign company to become involved in the country’s top information infrastructure project,CCoca-Cola has been voted the top international company in Asia, according to a recent survey published by the Far Eastern Economic Review, a major Asian magazine. Readers of this and other prominent Asian economic magazines choose Coca-Cola from among 500 large international companies in Asia. Cola-Cola is now the world’s largest beverage company serving 685 million drinks per day in more than 195 countries.DGRD, the manufacturing giant, plans to cut 1,500 jobs at its Portland factory over the next five years after union refusal to increase productivity. As a result, GRD have been forced to downsize the Portland plant. It has been voted the best multinational company in Asia.()