Question

Item1 Return to questionItem 1 Cash flows during the first year of operations for the Harman-Kardon Consulting Company were as follows: Cash collected from customers, $305,000; Cash paid for rent, $33,000; Cash paid to employees for services rendered during the year, $113,000; Cash paid for utilities, $43,000. In addition, you determine that customers owed the company $53,000 at the end of the year and no bad debts were anticipated. Also, the company owed the gas and electric company $1,300 at year-end, and the rent payment was for a two-year period. Calculate accrual net income for the year.

Answer 1

Answer:

$184,200

Explanation:

Revenues:

= ($305,000 + $53,000) = $358,000

Expenses:

Rent = ($33,000/2) = ($16,500)

Salaries = ($113,000)

Utilities = ($43,000 + $1,300) = ($44,300)

Total Expenses = $16,500 + $113,000 + $44,300= $173,800

Accrual Net income = $358,000 - $173,800

Accrual Net income = $184,200