Reference no: EM132088582

Question - Activity at the Clarkson Company for the first six months of 2016 was slow. At the end of June, the company borrowed $4,000. During the first six months of the year, the sales revenue was $12,000, but only $5,000 of that amount was collected in cash. Amounts for rent, insurance, and salaries for the first six months, paid in cash, were $3,000, $200, and $2,800, respectively. Supplies costing $1,800 for a new service to be introduced in the second half of the year were ordered on June 15 and received on June 30. The supplies were bought on account and will be paid for in July. In addition, a 2016 corporate property tax bill for $1,200 for the entire year was paid on June 30, 2016.

Compute the amount of net income Clarkson Company should report for the six months ended June 30, 2016, using accrual accounting. In order to receive full credit, show your work and/or explain how you computed your answer.