Question

Cash flows during the first year of operations for the Harman-Kardon Consulting Company were as follows: Cash collected from customers, $375,000; Cash paid for rent, $47,000; Cash paid to employees for services rendered during the year, $127,000; Cash paid for utilities, $57,000. In addition, you determine that customers owed the company $67,000 at the end of the year and no bad debts were anticipated. Also, the company owed the gas and electric company $2,700 at year-end, and the rent payment was for a two-year period. Calculate accrual net income for the year.

Answer 1

Net Income for the year 234.500

Step-by-step explanation:

Income Cash collected 375.000

Income Customer Owed 67.000

Total Income 442.000

Expenses Employees 127.000

Utilities 57.000

Rent 23.500 The effect on results of for 1 year was paid for 2 years in advance.

Total Expenses 207.500

Net Income 234.500