May 1: Prepaid rent for three months, $1,800 May 5: Received and paid electricit

Question

May 1: Prepaid rent for three months, $1,800 May 5: Received and paid electricity bill, $230 May 9: Received cash for meals served to customers, $2,300 May 14: Paid cash for kitchen equipment, $3,030 May 23: Served a banquet on account, $2,860 May 31: Made the adjusting entry for rent (from May 1) May 31: Accrued salary expense, $1,800 May 31: Recorded depreciation for May on kitchen equipment, $600 If Sweet Catering had recorded transactions using the Cash method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign (2,700) If Sweet Catering had recorded transactions using the Accrual method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign.

Explanation / Answer

CALCULATE NET INCOME UNDER CASH AND ACCURAL METHOD :

Net income under cash method = 270

Net income under accural method = 1930

CASH ACCURAL Rent (1800) (600) Electricity bill (230) (230) Service revenue (cash) 2300 2300 Service revenue (credit) 2860 Salary expenses (1800) Depreciation (600) NET INCOME 270 1930

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.