In its first year of operations, Mary Corp. earned $$61,200$ in service revenue. Of that amount, $$10,300$ was on account and the remainder, $$50,900,$ was collected in cash from customers.

The company incurred various expenses totalling $$35,600,$ of which $$29,800$ was paid in cash. At year end, $$5,800$ was still owing on account. In addition, Mary prepaid $$4,300$ for insurance coverage for the last half of the first year and the first half of the second year. Mary expects to owe $$5,300$ of income tax when it files its corporate income tax return after year end.

$($a$)$

Calculate the first year$$s net income under the accrual basis of accounting.

Answer rating: 100% (QA)

To calculate the net income under the accrual basis of accounting we need to consider the revenues e... View the full answer