Question

During Year 1, Chung Corporation earned $7,000 of cash revenue and accrued $4,100 of salaries expense. Required Based on this information alone: Prepare the December 31, Year 1, balance sheet. Determine the amount of net income that Chung would report on the Year 1 income statement. Determine the amount of net cash flow from operating activities that Chung would report on the Year 1 statement

Answer 1

Based on the information given  the amount of net income that Chung would report on the Year 1 income statement is $2,900.

Net Income:      

Using this formula

Net income=Cash Revenue-Salary Expense

Where:

Cash Revenue=$7,000

Salary Expense=$4,100

Let plug in the formula

Net income=$7,000-$4,100

Net income=$2,900

Inconclusion  the amount of net income that Chung would report on the Year 1 income statement is $2,900.

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