what is the companys 2024 net income using accrual - basis accounting? f) $5,250 g) $5,750 h) $9,250 j)…

what is the companys 2024 net income using accrual - basis accounting? f) $5,250 g) $5,750 h) $9,250 j) $9,750 given the data below for a firm in its first year of operation, determine net income under the accrual basis of accounting. cash received from customers $45,000 accounts receivable 12,000 cash paid for expenses 26,000 accounts payable (related to expenses) 3,000 prepaid rent for next period 7,000 a) $12,000 b) $28,000 c) $21,000 d) $19,000 a company had the following transactions during 2024: sales of $9,000 on account

what is the companys 2024 net income using accrual - basis accounting? f) $5,250 g) $5,750 h) $9,250 j) $9,750 given the data below for a firm in its first year of operation, determine net income under the accrual basis of accounting. cash received from customers $45,000 accounts receivable 12,000 cash paid for expenses 26,000 accounts payable (related to expenses) 3,000 prepaid rent for next period 7,000 a) $12,000 b) $28,000 c) $21,000 d) $19,000 a company had the following transactions during 2024: sales of $9,000 on account

Answer

Explanation:

Step1: Determine revenues under accrual - basis

Under accrual - basis accounting, revenues include both cash received from customers and accounts receivable. So total revenues = Cash received from customers+Accounts receivable = $45000 + 12000=$57000$.

Step2: Determine expenses under accrual - basis

Under accrual - basis accounting, expenses are the sum of cash paid for expenses and accounts payable related to expenses. The prepaid rent for next period is not an expense for the current period. So total expenses = Cash paid for expenses+Accounts payable (related to expenses)=$26000 + 3000=$29000$.

Step3: Calculate net income

Net income = Revenues - Expenses. So net income=$57000−29000=$28000$.

Answer:

b) $28,000