Thursday, 7 May 2015

Listed below are several transactions that took place during the second two years of operations for RPG Consulting.

Listed below are several transactions that took place during the second two years of operations for RPG Consulting.
   
  Year 2 Year 3
  Amounts billed to customers for services rendered $ 350,000   $ 450,000  
  Cash collected from credit customers   260,000     400,000  
  Cash disbursements:            
       Payment of rent   80,000     0  
       Salaries paid to employees for services rendered during the year   140,000     160,000  
       Travel and entertainment   30,000     40,000  
       Advertising   15,000     35,000  

   
     In addition, you learn that the company incurred advertising costs of $25,000 in year 2, owed the advertising agency $5,000 at the end of year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated bad debts on receivables, and the rent payment was for a two-year period, year 2 and year 3.

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