Question

ENC Corp. collected $90,000 from customers in 2015, of which $50,000 was from revenue earned on...

ENC Corp. collected $90,000 from customers in 2015, of which $50,000 was from revenue earned on account in 2014. In addition, ENC earned $30,000 of revenue in 2015 which will not be collected until 2016. In 2015, ENC paid $70,000 for expenses. Of this amount paid, $20,000 was for expenses incurred on account in 2014. In addition, ENC also incurred $10,000 expenses in 2015, which will not be paid until 2016. Based on the above information, what is ENC’s 2015 accrual-basis net income:

Select one:

a. $10,000

b. $20,000

c. $30,000

d. $40,000

Homework Answers

Answer #1
Accrued Revenue for 2015:
Collections in 2015 $90,000
Less: Revenue Earned in 2014 $50,000
Add: Revenue Earned in 2015 but to be collected in 2016 $30,000
Accrued Revenue for 2015 $70,000
Accrued Expenses for 2015:
Payment for Expenses in 2015 $70,000
Less: Expenses incurred in 2014 $20,000
Add: Expenses incurred in 2015 but to be paid in 2016 $10,000
Accrued Expenses for 2015 $60,000
Accrual - basis Net Income for 2015:
Accrued Revenue for 2015 $70,000
Less: Accrued Expenses for 2015 $60,000
Net Income $10,000

Correct Option: a.$10,000

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In its first year of operations, Angela Corp. earned $47,400 in service revenue. Of that amount,...
In its first year of operations, Angela Corp. earned $47,400 in service revenue. Of that amount, $7,500 was on account and the remainder, $39,900, was collected in cash from customers. The company incurred various expenses totalling $33,400, of which $29,900 was paid in cash. At year end, $3,500 was still owing on account. In addition, Angela prepaid $2,000 for insurance coverage that covered the last half of the first year and the first half of the second year. Angela expects...
Busby Corp. uses cash‐basis accounting for its records. During 2019, Busby collected $780,000 from its customers,...
Busby Corp. uses cash‐basis accounting for its records. During 2019, Busby collected $780,000 from its customers, made payments of $420,000 to its suppliers for inventory, and paid $170,000 for administrative costs. Busby wants to prepare accrual‐basis financial statements. In gathering information for the accrual‐basis financial statements, Busby discovered the following:   1. Customers owed Busby $40,000 at the beginning of 2019 and $36,000 at the end of 2019.   2. Busby owed suppliers $19,000 at the beginning of 2019 and $28,000 at...
Balance Sheet 2016 2015 2014 Cash 50,000 45000 40,000 Accounts receivable 80,000 70000 60,000 Inventories 180,000...
Balance Sheet 2016 2015 2014 Cash 50,000 45000 40,000 Accounts receivable 80,000 70000 60,000 Inventories 180,000 145000 110,000 Plant & equipment 300,000 280000 260,000 Less accumulated depreciation -40,000 -30000 -20,000 Total assets 570,000 510000 450,000 Accounts payable 100,000 125000 150,000 Accrued liabilities 70,000 60000 50,000 Mortgage payable 80,000 40000 60,000 Common stock 130,000 110000 90,000 Retained earnings 190,000 175000 160,000 Total liabilities and equity 570,000 510000 450,000 Income Statement 2014 2015 2016 Net Sales 680,000 600,000 640000 Cost of goods...
Star Corp., an accrual-method C corporation, incurred the following expenses in 2018 (all of which are...
Star Corp., an accrual-method C corporation, incurred the following expenses in 2018 (all of which are ordinary and neccessary unless the facts indicate otherwise): Office rent: $50,000 CEO compensation: $1,500,000 Salary paid to janitor: $250,000 Business meals: $60,000 (100% of the amount paid) Client entertainment: $100,000 (100% of the amount paid) Traffic fines: $5,000 Advertising: $70,000 Taxes & licenses (state, local & payroll): $30,000 Life insurance policy on CEO - premiums: $12,000 Average office rents in the area run $50,000-$55,000/year...
On Jan 1, 2015, Petunia Corp purchased an 70% interest in the common stock of Sunflower...
On Jan 1, 2015, Petunia Corp purchased an 70% interest in the common stock of Sunflower Corp. for $350,000.00 Sunflower had the following Balance Sheet on the date of acquisition: Sunflower Corporation       Balance Sheet         Jan 1, 2015                      Assets:                                                                                    Liabilities & Equity Accounts Receivable              $40,000.                      Accounts Payable       $42,297 Inventory                                20,000.                       Bonds Payable                       $100,000 Land                                        35,000                        Discount on BP            (2,297) Buildings                                250,000.                      Common Stk ($10 par) $10,000 Accumulated Depreciation     (50,000)                      Paid in Capital               $90,000 Equipment                              $120,000                     Retained Earnings      $115,000....
2. The Larson Company prepared the following income statement using the cash basis of accounting: THE...
2. The Larson Company prepared the following income statement using the cash basis of accounting: THE LARSON COMPANY Income Statement, Cash Basis Year Ended December 31, 2017 Service revenue $460,000 Expenses 220,000 Profit $240,000 Additional data: 1. Service revenue includes $40,000 collected from a customer for whom services were provided in 2016, and who was billed in 2016. 2. There are an additional $15,000 of expenses that were incurred on account, for which payment will not be made until 2018....
a $1,000 note from one of your customers was collected by the bank interest revenue earned...
a $1,000 note from one of your customers was collected by the bank interest revenue earned by the note above EFT deposit from a customer deposit in transit outstanding checks NSF check bank service charge charges for some other company’s safe deposit box were posted to your account 1. added to the company’s books 2. bubtracted from the company’s books 3. added to the bank statement balance 4. subtracted from the bank statement balance
ABC Company operates three segments, of which two of them were showing a loss. Segment 1...
ABC Company operates three segments, of which two of them were showing a loss. Segment 1 Segment 2 Segment 3 Total Sales…………………… $100,000 $200,000 $300,000 $600,000 Less Cost of goods sold 80,000 150,000 200,000 430,000 Gross margin…………. 20,000 50,000 100,000 170,000 Less Operating expenses 30,000 70,000 70,000 170,000 Net operating income…. $(10,000) $(20,000) $30,000     $0                            For each segment, 40% of its cost of goods sold and operating expenses are variable expenses and the remaining balances are fixed...
Revenue recognition – accrual basis vs. cash basis: Ring The Bells, Inc. provides doorbell repair services...
Revenue recognition – accrual basis vs. cash basis: Ring The Bells, Inc. provides doorbell repair services to customers.  The accountant for Ring The Bells noted the following events which took place during April, 2018: On April 1st, provided services worth $1,000 to customers. Customers paid $200 in cash on April 1st, the remaining $800 will be collected in May. On April 6th, received $440 in cash in advance from customers for services which will be provided on May 13th, 2018. On...
Company A developed the following budgeted data: Budgeted Sales…… 70% of sales on account are collected...
Company A developed the following budgeted data: Budgeted Sales…… 70% of sales on account are collected in the month of sale, 15% of sales on account are collected in the first month following the sale, 10% of sales on account are collected in the second month following the sale. Total budgeted sales in June ($40,000 of total sales are sales on account) $80,000 Total budgeted sales in July ($40,000 of total sales are sales on account) $95,000 Total budgeted sales...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • Consider insertsort. Suppose that the input array A has 1% probability to be monotonically decreasing. Show...
    asked 9 minutes ago
  • Your company is thinking of introducing a Bring Your Own Device (BYOD) policy. You have been...
    asked 16 minutes ago
  • Attached is the file GeometricObject.java. Include this in your project, but do not change. Create a...
    asked 18 minutes ago
  • Suppose the number of cars in a household has a binomial distribution with parameters n =...
    asked 21 minutes ago
  • HR needs some information on the new interns put into a database. Given an id, email,...
    asked 42 minutes ago
  • Problem solving strategies Questions years = input("Enter a number of years and I'll tell you how...
    asked 46 minutes ago
  • Calculate ?Hrxn for the following reaction: CH4(g)+4Cl2(g)?CCl4(g)+4HCl(g) Use the following reactions and given ?H?s. C(s)+2H2(g)?CH4(g)?H=?74.6kJC(s)+2Cl2(g)?CCl4(g)?H=?95.7kJH2(g)+Cl2(g)?2HCl(g)?H=?184.6kJ Express...
    asked 53 minutes ago
  • ASCII (American Standard Code for Information Interchange) has an encoding for every character of the alphabet,...
    asked 1 hour ago
  • Is home confinement with electronic monitoring a deterrent? Are there negatives to being confined to one’s...
    asked 1 hour ago
  • Social hostility can have severe lasting effects of interperpersonal relationship during our adolescence years, which if...
    asked 1 hour ago
  • - A series RLC circuit has R=15 ?, L=1.5 H, and C=15 ?F. (a) For what...
    asked 1 hour ago
  • TV Circuit has 30 large-screen televisions in a warehouse in Erie and 60 large-screen televisions in...
    asked 1 hour ago