Cash Cash-Basis Accrual-Basis Impact on: Balance Net Income Net Income +$1,500 +$1,500 $0 (a) Receive $1,500 from customers who were billed for services in April. (b) Provide $3,200 of consulting services to a local business. Payment is not expected until June. (c) Purchase office supplies for $400 on account. All supplies are used by the end of May. (d) Pay $600 to workers. $400 is for work in May and $200 is for work in April. (e) Pay $200 to advertise in a local newspaper in May. Totals

Cash Cash-Basis Accrual-Basis Impact on: Balance Net Income Net Income +$1,500 +$1,500 $0 (a) Receive $1,500 from customers who were billed for services in April. (b) Provide $3,200 of consulting services to a local business. Payment is not expected until June. (c) Purchase office supplies for $400 on account. All supplies are used by the end of May. (d) Pay $600 to workers. $400 is for work in May and $200 is for work in April. (e) Pay $200 to advertise in a local newspaper in May. Totals

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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I need prepare the income statement in accordance with genrally accepted accounting principles. Revenue: services provides to cotumers.......$17,000 investment by stockholders..............5,000 loan from bank.....................................15,000 total $37,000 expenses: Payments to long-term creditors...........................$11,700 expenses required to provide services to cutomers....................................................7,800 purchased of land......................................................16,000 total 35,500 net income $1,500
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