Primo Industries collected $105,000 from customers in 2020. Of the amount collected, $25,000 was for services performed
Question:
Primo Industries collected $105,000 from customers in 2020. Of the amount collected, $25,000 was for services performed in 2019. In addition, Primo performed services worth $40,000 in 2020, which will not be collected until 2021.
Primo Industries also paid $72,000 for expenses in 2020. Of the amount paid, $30,000 was for expenses incurred on account in 2019. In addition, Primo incurred $42,000 of expenses in 2020, which will not be paid until 2021.
Instructions
(a) Compute 2020 cash-basis net income.
(b) Compute 2020 accrual-basis net income.
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Related Book For
Financial and Managerial Accounting
ISBN: 978-1119392132
3rd edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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