Daube Company’s operations for the month of July are summarized as follows: Prov

Question

Daube Company’s operations for the month of July are summarized as follows: Provided $10,000 of services on account. Received $8,000 cash from customers for services provided in July. Received $2,000 cash for services to be provided in August. Received $6,000 cash from customers on account for services provided in June. Paid June’s warehouse rental bill on account in the amount of $2,000. Received July’s warehouse rental bill of $3,000; set it aside to be recorded at a later date. Required: Determine the net income for July using the cash basis of accounting. Determine the net income for July using the accrual basis of accounting.

Explanation / Answer

Net Income for July ( Cash Basis)

Net Income for July ( Accrual Basis)

Received July's warehouse rental bill

Net Income

$ 3000

$ 21000

Particular Amount ($) Received cash for service provided in july $ 8000 Received cash for services provided in august $ 2000 Received cash for service provided in june $ 6000 Received July's warehouse rental bill $ 3000 Paid June's warehouse rental bill ($ 2000) Net Income $ 17000

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