Total Pool Services earned $115,000 of service revenue during 2016. Of the $115,000 earned, the business received
Question:
Total Pool Services earned $115,000 of service revenue during 2016. Of the $115,000 earned, the business received $95,000 in cash. The remaining amount, $20,000, was still owed by customers as of December 31. In addition, Total Pool Services incurred $80,000 of expenses during the year. As of December 31. $13,000 of the expenses still needed to be paid. In addition, Total Pool Services prepaid $10,000 cash in December 2016 for expenses incurred during the next year.
1. Determine the amount of service revenue and expenses for 2016 using a cash basis accounting system.
2. Determine the amount of service revenue and expenses for 2016 using an accrual basis accounting system.
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson