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Determine net income under the accrual basis of accounting

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Reference no: EM132172102

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Q1. Given the data below for a firm in its first year of operation, determine net income under the accrual basis of accounting.

Revenue recognized $19,000

Accounts receivable $3,000

Expenses incurred $7,250

Accounts Payable (related to expenses) $750

Supplies purchased with cash $1,800

a. 11,750

b. 14,000

c. $9,500

d. $12,200

Q2. What is La More's 20X1 net income using cash basis accounting?

La More Company had the following transactions during 20X1

  • Sales of $9,000 on account
  • Collected $4,000 for services to be performed in 20X2
  • Paid $2,650 cash in salaries
  • Purchased airline tickets for $500 in December for a trip to take place in 20X2

a. $10,350

b. $1,350

c. $9.850

d. $850

Reference no: EM132172102

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