May 1: Prepaid rent for three months,$1,800 May S: Received and paid electricity

Question

May 1: Prepaid rent for three months,$1,800 May S: Received and paid electricity bill, s80 May 9: Received cash for meals served to customers, $2,170 May 14: Paid cash for kitchen equipment, $3,800 May 23: Served a banquet on account, $2,730 May 31: Made the adjusting entry for rent (from May 1) May 31: Accrued salary expense, $1,600 May 31: Recorded depreciation for May on kitchen equipment, $580 If Sweet Catering had recorded transactions using the Cash method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign. If Sweet Catering had recorded transactions using the Accrual method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign C RESET 0 Incorrect. Try reviewing the Hint to better understand the goa CHECK ANSWER

Explanation / Answer

Calculation of Income/loss on cash basis Prepaid Rent -1800 Electricity Paid -80 Cash Received for meals served 2170 Cash paid for kitchen Equipment -3800 1 Total Income /(loss) -3510 Answer Calculation of Income/loss on cash basis Electricity Paid -80 Cash Received for meals served 2170 Served Banquet 2730 Rent expense -600 Salary expense -1600 Depreciation -580 2 Net Income/(Loss) 2040 Answer

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