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In December 2018, Quality Contractor signs an agreement to construct a garage for $22,000.00. In January...

In December 2018, Quality Contractor signs an agreement to construct a garage for $22,000.00. In January 2019, Quality begins construction of the garage and incurred cost of $18,000.00 on credit. By the end of January, Quality delivers the finished garage to the buyer. In February 2019, Quality collects $22,000.00 from the buyer, and in March 2019 pays the full amount due to the creditors.

You are required to prepare the income statement under the cash and accrual bases from information in the scenario. Your answers should be presented in the format similar to the templates below.     

QUALITY CONTRACTOR

INCOME STATEMENT – CASH BASIS

FOR THE MONTH OF:

                                                                                              January                February            March             Total

?? Receipts

?? Payments                                                                                                                                                                

Net Income (loss)

2.5 marks

QUALITY CONTRACTOR

INCOME STATEMENT – ACCRUAL BASIS

FOR THE MONTH OF:

                                                                        January                February            March             Total

??Receipts

?? Payments                                                                                                                                                               

Net Income (loss)

2.5 marks

Business   Accounting   
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Answer #1

QUALITY CONTRACTOR

INCOME STATEMENT - CASH BASIS

FOR THE MONTH OF:

January February March Total

Receipts 0.00 22,000.00 0.00 22,000.00

Payments 0.00 0.00 18,000.00 18,000.00

Net Income (loss) 0.00 22,000.00 (18,000.00) 4,000.00

QUALITY CONTRACTOR

INCOME STATEMENT - ACCRUAL BASIS

FOR THE MONTH OF:

January February March Total

Receipts 22,000.00 0.00 0.00 22,000.00

Payments 18,000.00 0.00 0.00 18,000.00

Net Income (loss) 4,000.00 0.00   0.00 4,000.00

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