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SWFT Comprehensive Volume 2019

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 7DQ

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Johnny's lawn service erned $200,000 of service revenues for 2020. General accounting

Johnny's Lawn Service earned $200,000 of service revenues for
2020, where $190,000 was collected in cash and $10,000 remains in
Accounts Receivable as of 12/31/20. Also, $155,000 of expense was
incurred during the year, where $140,000 of the expense was paid
for with cash, and $15,000 remains in Accounts Payable. Using
accrual-basis accounting, calculate Johnny's Lawn Service net
income for 2020.
a. $35,000
b. $45,000
c. $50,000
d. $60,000

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