Question

UCLUIU UUSI JU V COMPUTER CLASS INTRO INTO BUIS Inti - Homework Saved Help statement accounts had zero balances and its balance sheet account balances were as follows: $ $ Cash Accounts receivable Supplies Equipment Land Building 6,500 30, see 1,480 10,000 7,700 27,100 Accounts payable Unearned revenue Long-term note payable Common stock Additional paid-in capital Retained earnings 9, 100 -3,240 47,500 1,600 6,400 15,740 a. Rebuilt and delivered five pianos in January to customers who paid $18,500 in cash. b. Received a $500 deposit from a customer who wanted her piano rebuilt. c. Rented a part of the building to a bicycle repair shop; received $820 for rent in January d. Received $8,100 from customers as payment on their accounts. e. Received an electric and gas utility bill for $440 to be paid in February f. Ordered $950 in supplies. g. Paid $1,940 on account in January h. Received from the home of Stacey Eddy, the major shareholder, a $910 tool (equipment) to use in the in exchange for 140 shares of $1 par value stock. i. Paid $14,400 in wages to employees who worked in January. j. Declared and paid a $1,900 dividend (reduce Retained Earnings and Cash). k. Received and paid cash for the supplies in (1)
what is net income if staceys used the cash basis of accounting?

Answer 1

Net Income Under Cash Basis Of Accounting

$ 10,630

Explanation:

1) In cash basis accounting, Revenue is recorded when cash is received & expense is recorded when cash is paid.

2)

Cash Receipts	$ 27,920	( transaction through A to D)
Less: Cash Paymemt	( $ 17,290)	( transaction G, I , K)
Net Income ( Cash Basis)	$ 10,630