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
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
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
Transcribed Image Text: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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