Concordia Industries collected $105,877 from customers in 2014. Of the amount collected, $27,803 was from revenue accrued from services performed in 2013. In addition, Concordia recognized $45,640 of revenue in 2014, which will not be collected until 2015.
Concordia Industries also paid $72,985 for expenses in 2014. Of the amount paid, $29,644 was for expenses incurred on account in 2013. In addition, Concordia incurred $38,504 of expenses in 2014, which will not be paid until 2015.
A) as per cash basis,revenues and expenses are recognised as and when cash is received or paid, in 2014, net income= total cash receipt-total cash pmt=105560-71267=$34293.
B) as per accrual basis, it's recognised as and when they are earned or incurred, in this case, revenue earned in 2014=105560-27878(earned in 2013,so excluded)+45699(earned in 2014,so included)=123381, expense incurred in 2014=71267-30240(incured in previous yr,hence excluded from total)+38312(incrd in 2014,so included)=79339, hence ,net income=revenue earned-expenses incurred=123381-79339=$44042.
May 11th, 2015
Did you know? You can earn $20 for every friend you invite to Studypool!