Newman Consulting Company maintains its records on a cash basis. During 2018 the

Question

Newman Consulting Company maintains its records on a cash basis. During 2018 the following cash flows were recorded: cash received from customers, $590,000; and cash paid for salaries, utilities, and advertising, $325,000, $52,000, and $29,000, respectively. You also determine that customers owed the company $65,000 and $77,000 at the beginning and end of the year, respectively, and that the company owed the utility company $11,000 and $8,000 at the beginning and end of the year, respectively. Complete the table to determine accrual net income for the year. Revenues Expenses: Salaries expense Utilities expense Advertising expense Net Income

Explanation / Answer

Accounts receivable Beg bal 65,000 Credit sale 602,000 Cash 590,000 End bal 77,000 Utility payable cash 52,000 Beg bal 11,000 expense 49000 End bal 8,000 Revenues 602,000 Expenses: Salaries expense 325,000 Utilities expense 49,000 Advertising expense 29,000 Net income 199,000

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