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Haskins and Jones, Attorneys-at-Law, maintains its books on a cash basis. During 2021, the law firm collected $640,000 for services rendered to its clients and paid out $431,000 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) In addition, 2021 depreciation expense on office equipment is $31,500. Required: Determine accrual basis net income for 2021. Cash basis income Add: Increase in deferred service revenue Decrease in accounts receivable Deduct: Answer is not complete. Accrual basis net income X X 2,300 X 5,000 X January 1, 2021 $ 81,000 6,400 11,100 11, 100 14, 100 ✓ $ 7,300 December 31, 2021 $76,000 8,300 9,000 13,400 18,900

Haskins and Jones, Attorneys-at-Law, maintains its books on a cash basis. During 2021, the law firm collected $640,000 for services rendered to its clients and paid out $431,000 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) In addition, 2021 depreciation expense on office equipment is $31,500. Required: Determine accrual basis net income for 2021. Cash basis income Add: Increase in deferred service revenue Decrease in accounts receivable Deduct: Answer is not complete. Accrual basis net income X X 2,300 X 5,000 X January 1, 2021 $ 81,000 6,400 11,100 11, 100 14, 100 ✓ $ 7,300 December 31, 2021 $76,000 8,300 9,000 13,400 18,900

FINANCIAL ACCOUNTING
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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Haskins and Jones, Attorneys-at-Law, maintains its books on a cash basis. During 2021, the law firm collected $640,000 for services rendered to its clients and paid out $431,000 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) In addition, 2021 depreciation expense on office equipment is $31,500. Required: Determine accrual basis net income for 2021. Cash basis income Add: Increase in deferred service revenue Decrease in accounts receivable Deduct: Answer is not complete. Accrual basis net income X X 2,300 X 5,000 X January 1, 2021 $ 81,000 6,400 11,100 11, 100 14, 100 ✓ $ 7,300 December 31, 2021 $76,000 8,300 9,000 13,400 18,900
Transcribed Image Text:Haskins and Jones, Attorneys-at-Law, maintains its books on a cash basis. During 2021, the law firm collected $640,000 for services rendered to its clients and paid out $431,000 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) In addition, 2021 depreciation expense on office equipment is $31,500. Required: Determine accrual basis net income for 2021. Cash basis income Add: Increase in deferred service revenue Decrease in accounts receivable Deduct: Answer is not complete. Accrual basis net income X X 2,300 X 5,000 X January 1, 2021 $ 81,000 6,400 11,100 11, 100 14, 100 ✓ $ 7,300 December 31, 2021 $76,000 8,300 9,000 13,400 18,900
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