Newman Consulting Company maintains Its records on a cash besis. During 2021 the following cash fows were recorded cash recelved for services rendered to clients, $450,000; and cash pald for salerles, utes, and advertising. $255,000, $38.000, and $15,000, respectively. You also determine that customers owed the company $56,000 and $63,000 et the beginning and end of the year, respectively, and that the company owed the utility compeny $6,000 and $3,500 at the beginning and end of the year, respectively. Complete the table to determine accrual net Income for the year. Revenue Expenses: Salaries expense Utilities expense Advertising expense Net Income
Newman Consulting Company maintains Its records on a cash besis. During 2021 the following cash fows were recorded cash recelved for services rendered to clients, $450,000; and cash pald for salerles, utes, and advertising. $255,000, $38.000, and $15,000, respectively. You also determine that customers owed the company $56,000 and $63,000 et the beginning and end of the year, respectively, and that the company owed the utility compeny $6,000 and $3,500 at the beginning and end of the year, respectively. Complete the table to determine accrual net Income for the year. Revenue Expenses: Salaries expense Utilities expense Advertising expense Net Income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:g Enabled: Exam 1 (Chapters 1-4)
Newman Consulting Company malntalns Its records on a cash besls. During 2021 the following cash flowes were recorded: cash
recelved for services rendered to clients, $450,000; and cash pald for salarles, utilities, and advertising $255,000, $38,000, and
$15,000, respectively. You also determine that customers owed the company $56,000 and $63,000 at the beginning and end of the
year, respectively, and that the company owed the utillty company $6,000 and $3,500 at the beglinning and end of the year,
respectively.
Complete the table to determine accrual net Income for the year.
Revenue
Expenses:
Salaries expense
Utilities expense
Advertising expense
Net Income
Expert Solution
Working:
Revenue Earned = Cash received + Ending Accounts receivable - Beginning Accounts receivable
= $450,000 + $63,000 - $56,000
= $457,000
Utilities expenses = Cash paid for utilities + Ending amount payable for utilities - Beginning amount payable for utilities
= $38,000 + $3,500 - $6,000
= $35,500
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