Beta had cash sales of $75,000 and credit sales of $65,000. Beta's operating expenses (not including depreciation) were $90,000, of which $20,000 cash was paid. In addition, Beta purchased a truck on the first day of the current year for $30,000 cash that was expected to have a useful life of 5 years and no salvage value (straight-line depreciation). What was Beta's accrual basis and cash basis net income? (Ignore income taxes.)

Beta had cash sales of $75,000 and credit sales of $65,000. Beta's operating expenses (not including depreciation) were $90,000, of which $20,000 cash was paid. In addition, Beta purchased a truck on the first day of the current year for $30,000 cash that was expected to have a useful life of 5 years and no salvage value (straight-line depreciation). What was Beta's accrual basis and cash basis net income? (Ignore income taxes.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Beta had cash sales of $75,000 and credit sales of $65,000. Beta's operating expenses (not
including depreciation) were $90,000, of which $20,000 cash was paid. In addition, Beta
purchased a truck on the first day of the current year for $30,000 cash that was expected to
have a useful life of 5 years and no salvage value (straight-line depreciation). What was
Beta's accrual basis and cash basis net income? (Ignore income taxes.)

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