Carillo Industries collected $104,000 from customers in 2017. of the amount coll

Question

Carillo Industries collected $104,000 from customers in 2017. of the amount collected, $24,300 was for services performed in 2016. In addition, Carillo performed services worth $40,300 in 2017, which will not be collected until 2018. expenses in 2017, which will not be paid until 2018. (a) Compute 2017 cash-basis net income Cash-basis net income s (b) Compute 2017 accrual-basis net income. Accrual-basis net income Carill Industries also paid $71,80o for expenses in 2017. Of the amount paid, $30,500 was for expenses incurred on account in 2016. In addition, Catillo incured $41,800 of

Explanation / Answer

a Cash basis: Revenues 104000 Less: Expenses 71800 Net income 32200 b Accrual basis: Revenues 120000 =(104000-24300)+40300 Less: Expenses 83100 =(71800-30500)+41800 Net income 36900 2 a Gross Profit = Net sales-Cost of goods sold Gross Profit = 980900-581500= $399400

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