Compute 2014 cash-basis net income

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Reference no: EM13502954

Exercise

Primo Industries collected $105,000 from customers in 2014. Of the amount collected, $25,000 was from services performed in 2013. In addition, Primo performed services worth $40,000 in 2014, which will not be collected until 2015.

Primo Industries also paid $72,000 for expenses In 2014. Of the amount paid, $30,000 was for expenses Incurred on account In 2013. In addition, Primo Incurred $42,000 of expenses in 2014, which will not be paid until 2015.

(a) Compute 2014 cash-basis net income.

Cash-basis net Income

(b) Compute 2014 accrual-basis net Income.

Accrual-basis net income

Reference no: EM13502954

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