'I just don't understand it!' Barry had received his accountant's calculation of his business profit, showing an accrual profit for his first year in business of $45 290. 'If I made so much money, why don't I have it in the bank? My bank account shows only $ 15 040 on hand!'

Barry operates Barry Supply, which provides stationery and office supplies to business customers. He has no store, just a small rented warehouse, and only one employee. Here are the data that Barry and his accountant used. Explain clearly to Barry:
1. How the accountant calculated the $45 290 profit.
2. Why there is only $15 040 on hand.

Transcribed Image Text:

Collected from customers during the year Still owing from customers at the end of the year (collected next year) Paid for products to resell and for other expenses, including wages, during the year Owing for products and other expenses at the end of the year (paid next year) Cost of unsold products on hand at the end of the year (all sold next year) Depreciation on equipment during the year 143710 15220 128 670 9040 26 070 2000