Question

Carillo Industries collected $105,000 from customers in 2017. Of the amount collected, $25,300 was for services performed in 2016. In addition, Carillo performed services worth $41,900 in 2017, which will not be collected until 2018. Carillo Industries also paid $73,800 for expenses in 2017. Of the amount paid, $30,200 was for expenses incurred on account in 2016. In addition, Carillo incurred $41,400 of expenses in 2017, which will not be paid until 2018. A) Compute 2014 cash-basis net income. B) Compute 2014 accrual-basis net income.

Answer 1

Answer:

A. Cash-basic net income $31,200

B.Accrual-basis net income$38,800

Explanation:

A)Computation of 2017 Carillo Industries cash-basis net income

Cash received from revenue$105,000

Less Cash paid for expenses$73,800

Cash-basic net income $31,200

B)Compututation of Carillo Industries 2017 accrual-basis net income

Revenues$121,600

(79,700+$41,900)

Less Expenses$82,800

($41,400 +$41,400)

Accrual-basis net income$38,800

Calculation for Revenue

$105,000-$25,300

=$79,700