How to calculate Accrual and Cash basis net income?
Asked by: megan
Conan Industries collected $ 100,000 from customers in 2010. Of the amount collected, $ 25,000 was from revenue earned on account in 2009. In addition, Conan earned $ 40,000 of revenue in 2010, which will not be collected until 2011.
Conan Industries also paid $ 70,000 for expenses in 2010. Of the amount paid, $ 30,000 was for expenses incurred on account in 2009. In addition, Conan incurred $ 42,000 of expenses in 2010, which will not be paid until 2011.
(a) Compute 2010 cash-basis net income. $
(b) Compute 2010 accrual-basis net income
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