Problem 2. Kersey Industries collected $140,000 from customers in 2017. Of the amount collected, $35,000...
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Accounting
Problem 2. Kersey Industries collected $140,000 from customers in 2017. Of the amount collected, $35,000 was from revenue earned on account in 2016. In addition, Kersey earned $45,000 of revenue in 2017, which will not be collected until 2018. Kersey Industries also paid $85,000 for expenses in 2017. Of the amount paid, $20,000 was for expenses incurred on account in 2016. In addition, Kersey incurred $26,000 of expenses in 2017, which will not be paid until 2018.
Instructions
(a) Compute 2017 cash-basis net income.
(b) Compute 2017 accrual-basis net income.
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