Question

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.

INCOME STATEMENT – CASH BASIS FOR THE MONTH OF:

January February March Total

?? Receipts

?? Payments

Net Income (loss)

INCOME STATEMENT – ACCRUE BASIS FOR THE MONTH OF:

January February March Total

?? Receipts

?? Payments

Net Income (loss)

Answer 1

Answer 1

INCOME STATEMENT – CASH BASIS FOR THE MONTH OF
	January	February	March
Receipts	$                   -	$        22,000
Payments	$                   -	$                 -	$                     (18,000)
Net Income(loss)	$                   -	$        22,000	$                     (18,000)

Answer 2

INCOME STATEMENT – ACCRUE BASIS FOR THE MONTH OF
	January	February	March
Receipts	$         22,000	$                 -	$                                 -
Payments	$       (18,000)	$                 -	$                                 -
Net Income(loss)	$            4,000	$                 -	$                                 -