Question

If Sweet Catering had recorded transactions using the Accrual method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign.May 1: Prepaid rent for three months, $2,100May 5: Received and paid electricity bill, $70May 9: Received cash for meals served to customers, $1,530May 14: Paid cash for kitchen equipment, $3,780May 23: Served a banquet on account, $1,780May 31: Made the adjusting entry for rent (from May 1).May 31: Accrued salary expense, $3,260May 31: Recorded depreciation for May on kitchen equipment, $670

Answer 1

Answer:

Net loss -$1,390

Explanation:

The computation of the net income is given below:

Service revenue    

On cash $1,530

ON credit $1,780

Service revenue $3,310

Less: Expense    

Utilities expense  -$70

Rent expense  -$700

Salaries expenses  -$3,260  

Depreciation expense -$670

Total expenses -$4,700

Net loss -$1,390