Question

Molly's Auto Detailers maintains its records on the cash basis. During 2021, Molly's collected $72,800 from customers and paid $19,100 in expenses. Depreciation expense of $4,300 would have been recorded on the accrual basis. Over the course of the year, accounts receivable increased $4,700, prepaid expenses decreased $1,500, and accrued liabilities decreased $2,300. Molly's accrual-basis net income was: Multiple Choice $50,300. $43,900. $54,900. $96,200. Next Visit question mapQuestion 9 of 15 Total9 of 15 Prev

Answer 1

Answer:

$50,300

Explanation:

The computation of net income based on accrual basis is given below:-

Net Income = Collection + Increase accounts receivable - Paid expenses - Depreciation expenses - Decrease in prepaid expenses - Decreased in accrual Liabilities

= $72,800 + $4,700 - $19,100 - $4,300 - $1,500 - $2,300

= $77,500 - $27,200

= $50,300