Question One:

below are the revenue and expense data for Alrowdah Co.: Received a total of 105,000 SAR from customers in 2016 (25,000 SAR was from revenue earned on account in 2015). Also, Alrowdah Co. earned 40,000 SAR of revenue in 2016, which will not be received until 2017. Paid 72,000 SAR for expenses in 2016 (30,000 SAR was for expenses incurred on account in 2015). Also, Alrowdah Co. incurred 42,000 SAR of expenses in 2016, which will not be paid until 2017.

Requirements:

1. Calculate 2016 net income using Cash-basis method.

2. Calculate 2016 net income using Accrual-basis method