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20 May, 14:57

Carillo Industries collected $105,000 from customers in 2017. Of the amount collected, $25,300 was for services performed in 2016. In addition, Carillo performed services worth $41,900 in 2017, which will not be collected until 2018. Carillo Industries also paid $73,800 for expenses in 2017. Of the amount paid, $30,200 was for expenses incurred on account in 2016. In addition, Carillo incurred $41,400 of expenses in 2017, which will not be paid until 2018. A) Compute 2014 cash-basis net income. B) Compute 2014 accrual-basis net income.

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  1. 20 May, 16:17
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    A. Cash-basic net income $31,200

    B. Accrual-basis net income$38,800

    Explanation:

    A) Computation of 2017 Carillo Industries cash-basis net income

    Cash received from revenue$105,000

    Less Cash paid for expenses$73,800

    Cash-basic net income $31,200

    B) Compututation of Carillo Industries 2017 accrual-basis net income

    Revenues$121,600

    (79,700+$41,900)

    Less Expenses$82,800

    ($41,400 + $41,400)

    Accrual-basis net income$38,800

    Calculation for Revenue

    $105,000-$25,300

    =$79,700
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