Delta Enterprises had credit sales of $50,000 and cash sales of $25,000 during the year. In 2017, Delta collected $28,000 of accounts receivable from credit sales. Delta incurred operating expenses of $12,000; of this amount, $5,500 was paid in cash, and the remaining $6,500 was a liability at year-end. In addition to these operating expenses, Delta also purchased a two-year insurance policy on January 1, 2017, at a cost of $4,000. What is Delta's 2017 cash basis net income?

Delta Enterprises had credit sales of $50,000 and cash sales of $25,000 during the year. In 2017, Delta collected $28,000 of accounts receivable from credit sales. Delta incurred operating expenses of $12,000; of this amount, $5,500 was paid in cash, and the remaining $6,500 was a liability at year-end. In addition to these operating expenses, Delta also purchased a two-year insurance policy on January 1, 2017, at a cost of $4,000. What is Delta's 2017 cash basis net income?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 10RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...

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