During 2011, Lavina Corporation had cash and credit sales of $94,000 and $91,000

Question

During 2011, Lavina Corporation had cash and credit sales of $94,000 and $91,000, respectively.  The company also collected accounts receivable of $53,400 and incurred expenses of $137,000, 80 percent of which were paid during the year.  In addition, Lavina paid $48,000 for a 12-month building rental, beginning on July 1, 2011.  What was Lavina

During 2011, Lavina Corporation had cash and credit sales of $94,000 and $91,000, respectively. The company also collected accounts receivable of $53,400 and incurred expenses of $137,000, 80 percent of which were paid during the year. In addition, Lavina paid $48,000 for a 12-month building rental, beginning on July 1, 2011. What was Lavina's accrual-basis net income (loss) for 2011?

Explanation / Answer

accrual-basis net income (loss) for 2011

Revenue = $94,000 + $91,000= $185,000

Expenses = $137,000

Rental expense= $48,000/2 = $24,000

Net income = 185,000-137,000-24000= $24000

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