Question

The following is selected information from Bonita Corporation for the fiscal year ending October 31, 2018

Cash received from customers $301000
Revenue recognized 376000
Cash paid for expenses 184000
Cash paid for computers on November 1, 2017 that will be used for 3 years (annual depreciation is $16100) 48300
Expenses incurred, including interest, but excluding any depreciation 218000
Proceeds from a bank loan, part of which was used to pay for the computers 95000
Based on the accrual basis of accounting, what is Monty Corporation’s net income for the year ending October 31, 2018?

Answer 1

Net Income = $141,900

Explanation:

Accrual Basis of Accounting

Net income of Monty Corporation’s for the

year ending October 31, 2018

Particulars Amount

Revenue recognized $376,000

Less: Expenses incurred, including interest, $218,000

but excluding any depreciation

Depreciation $16,100

Net Income $141,900