Question

Sunland Industries collected $105,000 from customers in 2019. Of the amount collected, $24,400 was for services performed in 2018. In addition, Sunland performed services worth $38,100 in 2019, which will not be collected until 2020. Sunland Industries also paid $73,200 for expenses in 2019. Of the amount paid, $31,000 was for expenses incurred on account in 2018. In addition, Sunland incurred $41,100 of expenses in 2019, which will not be paid until 2020. Compute 2019 cash-basis net income. Cash-basis net income s 3X Compute 2019 accrual-basis net income. Accrual-basis net income

Answer 1

Cash Basis Income:

1. Cash 105000

Sales revenue 105000

2. Cash 24400

Sales revenue 24400

3.No entry

4.Expense 73200

Cash 73200

5.Expense 31000

Cash 31000

6.No entry

Sunland industries

Cash basis net Income

Sales (105000+24400) =129400

less: expenses (73200+31000) =(104200)

Income 25200

Accrual Basis Income

. 1.a.) Account receivable 105000

Sales revenue 105000

b.) Cash 105000

Account receivable 105000

2. a)Account receivable 24400

Sales revenue 24400

b) Cash 24400

Account receivable 24400

3. Account Receivable 38100

Sales revenue 38100

4.a) Expense 73200

Payable 73200

b) Payable 73200

Cash 73200

5.Payable 31000

Cash 31000

6. Expenses 41100

Payable 41100

Sunland industries

Accrual basis net Income

Sales (105000+24400+38100) =167500

less: expenses (73200+41100) =(114300)

Income 53200