2. Accrual and modified cash basis. The following information pertains to Beta C
ID: 2362426 • Letter: 2
Question
2. Accrual and modified cash basis. The following information pertains to Beta Company for October: Services rendered during October to customers on account $14,380 Cash receipts from Owner investment 7,000 Customers on account 5,650 Cash customers for services rendered in October 6,800 Cash payments to Creditors for expenses incurred during October 4,400 Creditors for expenses incurred prior to October 2,100 Monroe Equipment for purchase of new machinery on October 1 8,400 Expenses incurred during October, to be paid in future months 3,725 The machinery is expected to have a service life of five years. Instructions Calculate Beta's net income for October, using the following methods: a. Accrual basis of accounting. b. Modified cash basis of accounting.Explanation / Answer
The following information pertains to ABC Company for October: Services rendered during October to customers on account $14,380 Cash receipts from Owner investment 7,000 Customers on account 5,650 Cash customers for services rendered in October 6,800 Cash payments to Creditors for expenses incurred during October 4,400 Creditors for expenses incurred prior to October 2,100 Monroe Equipment for purchase of new machinery on October 1 8,400 Expenses incurred during October, to be paid in future months 3,725 The machinery is expected to have a service life of five years. Instructions Calculate Beta's net income for October, using the following methods
Services rendered during October to customers on account $14,380
Cash receipts from
Owner investment 7,000
Customers on account 5,650
Cash customers for services rendered in October 6,800
Cash payments to
Creditors for expenses incurred during October 4,400
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