Question

Daube Company's operations for the month of July are summarized as follows: A. Provided $7,800 of services on account B. Received $3,100 cash from customers for services provided in July C. Received $1,000 cash for services to be provided in August. D. Received $5,700 cash from customers on account for services provided in June. E. Paid June's warehouse rental bill on account in the amount of $1,400. F. Received July's warehouse rental bill of $1,200; set it aside to be recorded at a later date. Required: a. Determine the net income for July using the cash basis of accounting. b. Determine the net income for July using the accrual basis of accounting. Complete this question by entering your answers in the tabs below. Required A Required B Net Income

Answer 1

Required a: Cash basis

Revenue ($3,100 + $1,000 + $5,700)	$9,800
(-) Expenses	($1,400)
Net income	$8,400

Required b: Accrual basis

Revenue ($7,800 + $3,100)	$10,900
(-) Expenses	($1,200)
Net income	$9,700