Cash flows during the year of operations for the Harman-Kardon Consulting Compan

Question

Cash flows during the year of operations for the Harman-Kardon Consulting Company were as follows: Cash collected from customers,$315,000;Cash paid for rent,$35,000;Cash paid to employees for services rendered during the year,$115,000;Cash paid for utilities,$45,000. In addition, you determine that customers owed the company $55,000 at the end of the year and no bad debts were anticipated. Also, the company owed the gas and electric company $1,500 at year-end, and the rent payment was for a two-year period. Calculate accrual net income for the year.

Explanation / Answer

Revenue = Cash collected from customers + Remaining accounts receivable
Revenue = $315,000 + $55,000
Revenue = $370,000

Rent Expense = Cash paid for rent / Number of period
Rent Expense = $35,000 / 2
Rent Expense = $17,500

Salaries Expense = Cash paid to employees for services rendered
Salaries Expense = $115,000

Utilities Expense = Cash paid for Utilities + Accrued utilities expense
Utilities Expense = $45,000 + $1,500
Utilities Expense = $46,500

Net Income = Revenue - Rent Expense - Salaries Expense - Utilities Expense
Net Income = $370,000 - $17,500 - $115,000 - $46,500
Net Income = $191,000

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.