Newman Consulting Company maintains its records on a cash ba

Newman Consulting Company maintains its records on a cash basis. During 2018 the following cash flows were recorded: cash received from customers, $590,000; and cash paid for salaries, utilities, and advertising, $325,000, $52,000, and $29,000, respectively. You also determine that customers owed the company $65,000 and $77,000 at the beginning and end of the year, respectively, and that the company owed the utility company $11,000 and $8,000 at the beginning and end of the year, respectively. Complete the table to determine accrual net income for the year. Revenues Expenses: Salaries expense Utilities expense Advertising expense Net Income

Solution

Accounts receivable Beg bal 65,000 Credit sale 602,000 Cash 590,000 End bal 77,000 Utility payable cash 52,000 Beg bal 11,000 expense 49000 End bal 8,000 Revenues 602,000 Expenses: Salaries expense 325,000 Utilities expense 49,000 Advertising expense 29,000 Net income 199,000