Skysong Industries collected $92,400 from customers in 2022. Of the amount collected, $22,000 was for services performed in 2021. In addition, Skysong performed services worth $35,200 in 2022, which will not be collected until 2023. Skysong Industries also paid $63,360 for expenses in 2022. Of the amount paid, $26,400 was for expenses incurred on account in 2021. In addition, Skysong incurred $36,960 of expenses in 2022, which will not be paid until 2023.
(a) Compute 2022 cash-basis net income.
(b) Compute 2022 accrual-basis net income. Accrual-basis net income $


Answer :

Answer:

(a) Compute 2022 cash-basis net income.

Revenue                                 $92,400

Expenses                               ($63,360)

Net income                            $29,040

(b) Compute 2022 accrual-basis net income.

Revenue  ($92,400 - $22,000 + $35,200)              $105,600

Expenses ($63,360 - $26,400 + $36,960)              ($73,920)

Net income                                                                  $31,680