Question

Newman Consulting Company maintains its records on a cash basis. During 2021 the following cash flows wete recorded: cash received for services rendered to clients, $440,000; and cash paid for salaries, utilities, and advertising, $250,000 $37.000, and $14,000, respectively. You also determine that customers owed the company $56,000 and $62,000 at the beginning and end of the year, respectively, and that the company owed the utility company $5.000 and $3,000 at the beginning and end of the year, respectively Complete the table to determine accrual net income for the year.

Answer 1

Income Statement
Service Revenue	$        446,000
Salaries Expense	$      (250,000)
Utilities Expense	$         (35,000)
Advertising Expense	$         (14,000)
Accrual Net Income	$        147,000

	Account Titles	Debit	Credit
1	Depreciation Expense	$          11,700
	Accumulated Depreciation		$       11,700
2	Salaries Expense	$            1,650
	Salaries Payable		$         1,650
3	Interest Expense	$            1,602
	Interest Payable		$         1,602
4	Interest Receivable	$            1,560
	Interest Revenue		$         1,560
5	Insurance Expense	$            7,050
	Prepaid Insurance		$         7,050
6	Supplies Expense
	Supplies
7	No entry
8	Rent Expense	$            1,350
	Prepaid Rent		$         1,350

Supplies expense could not be calculated as supplies balance is not given in trial.
Supplies expense = Unadjusted Balance of Supplies - $980

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