Exercise 2-19 (Algo) Cash versus accrual accounting [LO2-9] Haskins and Jones, Attorneys-at-Law, maintains its books on a cash basis. During 2024, the law firm collected $555,000 for services rendered to its clients and paid out $414,000 in expenses. You are able to determine the following information about accounts receivable, prepaid expenses, deferred service revenue, and accrued liabilities: Accounts receivable Prepaid insurance Prepaid rent Deferred service revenue Accrued liabilities (for various expenses) January 1, 2024 $ 64,000 December 31, 2024 $ 58,000 4,700 5,800 9,400 7,900 9,400 11,000 12,400 15,500 In addition, 2024 depreciation expense on office equipment is $23,000. Required: Determine accrual basis net income for 2024. Cash basis income Add: Increase in accounts receivable Dorrance in accounts receivable $ 141,000
Exercise 2-19 (Algo) Cash versus accrual accounting [LO2-9] Haskins and Jones, Attorneys-at-Law, maintains its books on a cash basis. During 2024, the law firm collected $555,000 for services rendered to its clients and paid out $414,000 in expenses. You are able to determine the following information about accounts receivable, prepaid expenses, deferred service revenue, and accrued liabilities: Accounts receivable Prepaid insurance Prepaid rent Deferred service revenue Accrued liabilities (for various expenses) January 1, 2024 $ 64,000 December 31, 2024 $ 58,000 4,700 5,800 9,400 7,900 9,400 11,000 12,400 15,500 In addition, 2024 depreciation expense on office equipment is $23,000. Required: Determine accrual basis net income for 2024. Cash basis income Add: Increase in accounts receivable Dorrance in accounts receivable $ 141,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vikram Bhai
![Exercise 2-19 (Algo) Cash versus accrual accounting [LO2-9]
Haskins and Jones, Attorneys-at-Law, maintains its books on a cash basis. During 2024, the law firm collected $555,000 for services
rendered to its clients and paid out $414,000 in expenses. You are able to determine the following information about accounts
receivable, prepaid expenses, deferred service revenue, and accrued liabilities:
Accounts receivable
Prepaid insurance
Prepaid rent
Deferred service revenue
Accrued liabilities
(for various expenses)
January 1,
2024
$ 64,000
December 31,
2024
$ 58,000
4,700
5,800
9,400
7,900
9,400
11,000
12,400
15,500
In addition, 2024 depreciation expense on office equipment is $23,000.
Required:
Determine accrual basis net income for 2024.
Cash basis income
Add:
Increase in accounts receivable
Dorrance in accounts receivable
$
141,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8491514b-ec64-4402-a3a2-d8a04e981cfc%2F2ac904dc-2236-4d25-804c-e4f24661ff62%2Ffboasj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 2-19 (Algo) Cash versus accrual accounting [LO2-9]
Haskins and Jones, Attorneys-at-Law, maintains its books on a cash basis. During 2024, the law firm collected $555,000 for services
rendered to its clients and paid out $414,000 in expenses. You are able to determine the following information about accounts
receivable, prepaid expenses, deferred service revenue, and accrued liabilities:
Accounts receivable
Prepaid insurance
Prepaid rent
Deferred service revenue
Accrued liabilities
(for various expenses)
January 1,
2024
$ 64,000
December 31,
2024
$ 58,000
4,700
5,800
9,400
7,900
9,400
11,000
12,400
15,500
In addition, 2024 depreciation expense on office equipment is $23,000.
Required:
Determine accrual basis net income for 2024.
Cash basis income
Add:
Increase in accounts receivable
Dorrance in accounts receivable
$
141,000
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