Revenue Recognition and Matching – Carrico Advertising, Inc. performs advertising services for……

Revenue Recognition and Matching

Carrico Advertising, Inc. performs advertising services for several Fortune 500 companies. The following information describes Carrico’s activities during 2011.

  1. At the beginning of 2011, customers owed Carrico $45,800 for advertising services performed during 2010. During 2011, Carrico performed an additional $688,800 of advertising services on account. Carrico collected $708,700 cash from customers during 2011.
  2. At the beginning of 2011, Carrico had $12,330 of supplies on hand for which it owed suppliers $8,150. During 2011, Carrico purchased an additional $14,600 of supplies on account. Carrico also paid $19,300 cash owed to suppliers for goods previously purchased on credit. Carrico had $2,230 of supplies on hand at the end of 2011.
  3. Carrico’s 2011 operating and interest expenses were $437,600 and $125,300, respectively.

Required:

1. Calculate Carrico’s 2011 income before taxes.
$

2.Calculate the amount of Carrico’s accounts receivable, supplies, and accounts payable at December 31, 2011.

Accounts receivable $
Supplies $
Accounts payable $

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