Question

Rebel Technology maintains its records using cash-basis accounting. During the year, the company received cash from customers, $31,000, and paid cash for salaries, $20,200. At the beginning of the year, customers owe Rebel $1,100. By the end of the year, customers owe $4,200. At the beginning of the year, Rebel owes salaries of $3,200. At the end of the year, Rebel owes salaries of $2,100. Determine cash-basis net income and accrual-basis net income for the year.

Answer 1

Determine cash-basis net income for the year.

10800

Determine accrual-basis net income for the year.

15000

Step-by-step explanation:

Cash Basic

1

Db Cash__________________ 31000

Cr Revenue_________________________ 31000

2

Db Salaries expenses_______ 20200

Cr Cash_____________________________ 20200

Accrual-basis

1

Db Cash__________________ 31000

Cr Account receivable__________________ 1100

Cr Revenue__________________________ 29900

2

Db Account receivable_____ 4200

Cr Revenue__________________________ 4200

3

Db Salaries expenses______ 19100

Db Account payable salaries_ 1100

Cr Cash_____________________________ 20200

Cash Basic Accrual-basis

Revenue 31000 34100

Expenses 20200 19100

Ner income 10800 15000