Provide correct answer Pluto Home Finders, Inc. (PHF), a dog placement service,operates in the Midwestern United States. In 2015 thecompany earned $145,000 in revenue by providingservices to customers. However, it collected only$120,000 of the revenue in cash. PHF expects to collectthe remaining $25,000 in 2016. In addition, PHF incurred$80,000 in expenses. However, by the end of 2015, PHFhad paid only $75,000 of the cash owed for expensesbecause it had not yet paid $5,000 to employees whohad worked during 2015 but had not been paid by theend of the year. PHF expects to pay $5,000 in cash tothe employees during 2016.Based on this information alone, what amount of netincome should PHF report on its 2015 financialstatements?

Step 1: Define Net IncomeNet income is calculated depending on the company's applied basis of…

Answered: Pluto Home Finders, Inc. (PHF), a dog…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 6MC

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Ee.92.
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Please show your solution in good accounting form. Thank you!

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