In its first year of operations, Maria Corp.earned 48,100 in service revenue.Of that amount, 8,200 was on account and the remainder, 39, 900, was collected in cash from customers. The company incurred various expenses totalling 32,300, of which 28,800 was paid in cash. At the year end, 3,500 was still owing on account. In addition, Maria prepaid 2,000 for insurance coverage that covered the last half of the first year and the first half of the second year. maria expects to owe 3000 of income tax when it files its corporate income tax return after year end.
In its first year of operations, Maria Corp.earned 48,100 in service revenue.Of that amount, 8,200 was on account and the remainder, 39, 900, was collected in cash from customers. The company incurred various expenses totalling 32,300, of which 28,800 was paid in cash. At the year end, 3,500 was still owing on account. In addition, Maria prepaid 2,000 for insurance coverage that covered the last half of the first year and the first half of the second year. maria expects to owe 3000 of income tax when it files its corporate income tax return after year end.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In its first year of operations, Maria Corp.earned 48,100 in service revenue.Of that amount, 8,200 was on account and the remainder, 39, 900, was collected in cash from customers.
The company incurred various expenses totalling 32,300, of which 28,800 was paid in cash. At the year end, 3,500 was still owing on account. In addition, Maria prepaid 2,000 for insurance coverage that covered the last half of the first year and the first half of the second year. maria expects to owe 3000 of income tax when it files its corporate income tax return after year end.
Transcribed Image Text:In its first year of operations, Maria Corp. earned $48,100 in service revenue. Of that amount, $8,200 was on account and the
remainder, $39,900, was collected in cash from customers.
The company incurred various expenses totalling $32,300, of which $28,800 was paid in cash. At year end, $3,500 was still owing on
account. In addition, Maria prepaid $2,000 for insurance coverage that covered the last half of the first year and the first half of the
second year. Maria expects to owe $3,000 of income tax when it files its corporate income tax return after year end.
(a)
Calculate the first year's net income under the accrual basis of accounting.
Net income under accrual basis $
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