Cray Company started year 2 with $60,000 in its cash and common stock accounts.
ID: 2402227 • Letter: C
Question
Cray Company started year 2 with $60,000 in its cash and common stock accounts. During year 2 Cray paid $45,000 cash for employee compensation. Assume this is the only transaction that occurred in year 2. Required Determine the total amount of assets at the end of year 2, assuming Cray is a manufacturing company and the employees were paid to make products. Determine the amount of expense recognized on the year 2 income statement, assuming Cray is a manufacturing company and the employees were paid to make products. Determine the total amount of assets at the end of year 2, assuming Cray is a service company. Determine the amount of expense recognized on the year 2 income statement, assuming Cray is a service company.
Explanation / Answer
1) Required Determine the total amount of assets at the end of year 2, assuming Cray is a manufacturing company and the employees were paid to make products.
Total assets at the end of year 2 = 60000-45000 = 15000
2) Determine the amount of expense recognized on the year 2 income statement, assuming Cray is a manufacturing company and the employees were paid to make products
AMount of expense = $45000
3) Determine the total amount of assets at the end of year 2, assuming Cray is a service company.
Total assets = 15000
Determine the amount of expense recognized on the year 2 income statement, assuming Cray is a service company.
AMount of expense = $45000