Answered

Looking for answers? Westonci.ca is your go-to Q&A platform, offering quick, trustworthy responses from a community of experts. Get immediate and reliable answers to your questions from a community of experienced experts on our platform. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform.

Cash flows during the first year of operations for the Harman-Kardon Consulting Company were as follows:
Cash collected from customers, $300,000
Cash paid for rent, $32,000
Cash paid to employees for services rendered during the year, $112,000
Cash paid for utilities, $42,000
In addition, you determine that customers owed the company $52,000 at the end of the year and no bad debts were anticipated. Also, the company owed the gas and electric company $1,200 at year-end, and the rent payment was for a two-year period.
Calculate accrual net income for the year.

Sagot :

anthougo

Answer:

Harman-Kardon Consulting Company

Calculating the Accrual Net Income:

= $164,800

Explanation:

a) Data and Calculations:

Sales Revenue:

Cash collected from customers = $300,000

Accounts receivable at year end      52,000

Total Sales Revenue =                  $352,000

Utilities Expense:

Cash paid for utilities = $42,000

Utilities payable                  1,200

Total utilities expense  $43,200

Accrual net income:

Sales revenue  $352,000

Expenses:

Rent       32,000

Salaries 112,000

Utilities  43,200 (187,200)

Net income      $164,800

b) Accrual net income is determined on the accrual basis of accounting.  This basis takes into account all accrued expenses and revenue, all prepaid expenses and revenue received in advance, and provides for depreciation expenses, unlike the cash basis of accounting.

Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Thank you for choosing Westonci.ca as your information source. We look forward to your next visit.