Reliable Corporation provides computer consulting services to the local community and keeps its accounting records using cash-basis accounting. For the current year, cash was received from customers, $42,000, and cash salaries to employees were paid,$23,000. At the beginning of the year, customers owe Reliable $1,200. By the end of the year, customers owe $6,400. At thebeginning of the year, Reliable owes employee salaries of $5,400. At the end of the year, Reliable owes employee salaries of$3,200.Determine cash-basis net income and accrual-basis net income for the current year.Cash-basis net incomeAccrual-basis net income

The cash basis of accounting says that we need to record only that transaction, which is related to…

Answered: Reliable Corporation provides computer…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 79P

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On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
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