Question

Haskins and Jones, Attorneys-at-Law, maintains its books on a cash basis. During 2021, the law firm collected $610,000 for services rendered to its clients and paid out $425,000 in expenses. You are able to determine the following information about accounts receivable, prepaid expenses, deferred service revenue, and accrued liabilities: January 1, 2021 December 31, 2021 Accounts receivable $ 75,000 $ 67,000 Prepaid insurance 5,800 7,100 Prepaid rent 10,500 9,600 Deferred service revenue 10,500 12,200 Accrued liabilities (for various expenses) 13,500 17,700 In addition, 2021 depreciation expense on office equipment is $28,500. Required: Determine accrual basis net income for 2021.

Answer 1

Step-by-step explanation:

We need to make T-Accounts to find the missing data..

Deffered Services

Opening -10500

Received 610000

Closing 12200

Sales 611700 this is Accrual Sales for the Year

Now we need to identify the actual Expenses incurred During the period by making general T Account putting their opening and closing balances and payments made during the year :

Partcular Prepaid Prepaid Accrued Total

rent Insurance Laibilities

Opening 10500 5800 -13500 77800

Closing -9600 -7100 17700 -66000

Cash paid 425000

Net Accrued = 77800-66000+425000= 428800

Accrued Income

Accrued Income = 611700

Accrued Expenses = -428800

Net Accrued Income = 182900

Answer 2

Answer for the question:

Haskins and Jones, Attorneys-at-Law, maintains its books on a cash basis. During 2021, the law firm collected $610,000 for services rendered to its clients and paid out $425,000 in expenses. You are able to determine the following information about accounts receivable, prepaid expenses, deferred service revenue, and accrued liabilities: January 1, 2021 December 31, 2021 Accounts receivable $ 75,000 $ 67,000 Prepaid insurance 5,800 7,100 Prepaid rent 10,500 9,600 Deferred service revenue 10,500 12,200 Accrued liabilities (for various expenses) 13,500 17,700 In addition, 2021 depreciation expense on office equipment is $28,500. Required: Determine accrual basis net income for 2021.

is given in the attachment.

Step-by-step explanation: