ages of S5000 ane ea, × Carmen Camry operate: × Connect https://newconnect mhedu

Question

ages of S5000 ane ea, × Carmen Camry operate: × Connect https://newconnect mheducation.com/low/connect.html chapter 3 classwork 1 G In its first year of operations, Roma Company reports the following: 10 points Earned revenues of $49,000 ($41,000 cash received from customers). Incurred expenses of $27,500 ($21,650 cash paid toward them). Prepaid $7,750 cash for costs that will not be expensed until next year Compute the company's first- year net income under both the cash basis and the accrual basis of accounting $ 41,00 49 27 Expenses Net income Prey 1 of1 Next

Explanation / Answer

Under cash basis ,Revenue is recorded in the year cash is received and expense is recorded in the year in which it is paid.

Under accrual basis ,Revenue is recorded in the year it is earned and expense is recorded in the year it is incurred.

Cash Accrual Revenue 41000 49000 Expense (29400)     [21650+7750] (27500) Net Income 11600 21500

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