Lauhl Corporation provides janitorial services to several of

Lauhl Corporation provides janitorial services to several office buildings. During April, Lauhl engaged in the following transactions: a. On April 1, Lauhl received $24,000 from Metro Corporation to provide cleaning services over the next 6 months. b. On April 5, Lauhl purchased and received $8,500 of supplies on credit from Eagle Supply Company. During the month, Lauhl paid $5,000 to Eagle and used $1,300 of the supplies. c. On April 20, Lauhl performed one-time cleaning services of $2,500 for Jones Company. Jones paid Lauhl the full amount on May 10. d. On April 30, Lauhl paid employees wages of $3,400. An additional $850 was owed to employees for work performed in April. Required Calculate the amount of net income that Lauhl should recognize in April under (1) cash-basis accounting and (2) accrual-basis accounting? Chat Answer

Solution

Calculate net income :

	Cash Basis	Accural basis
Revenue	24000	6500
Supplies expenses	(5000)	(1300)
Wages expenses	(3400)	(4250)
Net income	15600	950