Dr. Emma Armstrong, M.D., maintains the accounting records of the Blood Sugar Clinic on a cash basis.
Question:
Dr. Emma Armstrong, M.D., maintains the accounting records of the Blood Sugar Clinic on a cash basis. During 2017, Dr. Armstrong collected $146,000 in revenues and paid $55,470 in expenses. At January 1, 2017, and December 31, 2017, she had accounts receivable, unearned revenue, accrued liabilities, and prepaid expenses as follows (all long-lived assets are rented):
Instructions
Last week, Dr. Armstrong asked you, her CPA, to help her determine her income on the accrual basis. Write a letter to her explaining what you did to calculate net income on the accrual basis. Be sure to state net income on the accrual basis and to include a schedule of your calculations.
Step by Step Answer:
Intermediate Accounting
ISBN: 978-1119048534
11th Canadian edition Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy