Reference no: EM132513703

Cash versus accrual accounting:

Haskins and Jones, Attorney-at-Law, maintain its books on a cash basis. During 2018, the company collected $545,000 in fees from its clients and paid out $412,000 in expense. You are able to determine the following information about accounts receivable, prepaid expenses, deferred fee revenue, and accrued liabilities:

                                          January 1, 2018                               December 31, 2018

Accounts receivable           $ 62,000                                   $ 55,000

Prepaid insurance                   4,500                                  6,000

Prepaid rent                               9,200                             8,200

Deferred fee revenue                  9,200                        11,000

Accrued liabilities                        12,200                      15,600

1. In addition, 2018 depreciation expense on office equipment is $22,000.
2. Depreciation on the company's equipment is $10,000 for the year.

Required:

Question 1: What is the accrual basis net income for 2018.