Concordia Industries Ltd. collected £112,000 from customers in 2017. Of the amount collected, £30,000 was from revenue accrued from services performed in 2016. In addition, Concordia recorded £44,000 of revenue in 2017, which will not be collected until 2018.
Concordia Industries also paid £72,000 for expenses in 2017. Of the amount paid, £27,000 was for expenses incurred on account in 2016. In addition, Concordia incurred £37,000 of expenses in 2017, which will not be paid until 2018.
Instructions
(a) Compute 2017 cash-basis net income.
(b) Compute 2017 accrual-basis net income.