I'm having problem with Acct 4A Questions

Accounting
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Exercise 3-3 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) Compute 2014 cash-basis net income.

Cash-basis net income $

(b) Compute 2014 accrual-basis net income.

Accrual-basis net income $

May 11th, 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

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