#28 Fresha, Inc. has been using the accrual basis of accounting. However, an examination of the records reveals that some expenses and revenues have been handled on a cash basis by the inexperienced bookkeeper of the company. Income statements prepared by the bookkeeper reported 174,000 net income for 2017 and 222,000 net income for 2018. Further review of the records reveals that the following items were handled improperly. Rent of 7,800 was received from a lessee on December 23, 2017. It was recorded as income at that time even though the rental pertains to 2018. Salaries payable on December 31 have been consistently omitted from the records of that date and have been recorded as expenses when paid in the following year. The salary accruals recorded in this manner were: December 31, 2016 6,600 December 31, 2017 9,000 December 31, 2018 5,640 Invoices for office supllies purchased have been charged to expense accounts when received. Inventories of supplies on hand at the end of each year have been ignored, and no entry has been made for them. December 31, 20167,800 December 31, 20172,640 December 31, 20188,520 What is the corrected net income for 2018? Answer: 237,240 Pls provide solution and explanation for the answer above
#28 Fresha, Inc. has been using the accrual basis of accounting. However, an examination of the records reveals that some expenses and revenues have been handled on a cash basis by the inexperienced bookkeeper of the company. Income statements prepared by the bookkeeper reported 174,000 net income for 2017 and 222,000 net income for 2018. Further review of the records reveals that the following items were handled improperly. Rent of 7,800 was received from a lessee on December 23, 2017. It was recorded as income at that time even though the rental pertains to 2018. Salaries payable on December 31 have been consistently omitted from the records of that date and have been recorded as expenses when paid in the following year. The salary accruals recorded in this manner were: December 31, 2016 6,600 December 31, 2017 9,000 December 31, 2018 5,640 Invoices for office supllies purchased have been charged to expense accounts when received. Inventories of supplies on hand at the end of each year have been ignored, and no entry has been made for them. December 31, 20167,800 December 31, 20172,640 December 31, 20188,520 What is the corrected net income for 2018? Answer: 237,240 Pls provide solution and explanation for the answer above
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter6: Losses And Loss Limitations
Section: Chapter Questions
Problem 1BD
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#28
Fresha, Inc. has been using the accrual basis of accounting. However, an examination of the records reveals that some expenses and revenues have been handled on a cash basis by the inexperienced bookkeeper of the company. Income statements prepared by the bookkeeper reported 174,000 net income for 2017 and 222,000 net income for 2018. Further review of the records reveals that the following items were handled improperly.
- Rent of 7,800 was received from a lessee on December 23, 2017. It was recorded as income at that time even though the rental pertains to 2018.
- Salaries payable on December 31 have been consistently omitted from the records of that date and have been recorded as expenses when paid in the following year. The salary accruals recorded in this manner were:
December 31, 2016 6,600
December 31, 2017 9,000
December 31, 2018 5,640
- Invoices for office supllies purchased have been charged to expense accounts when received. Inventories of supplies on hand at the end of each year have been ignored, and no entry has been made for them.
December 31, 20167,800
December 31, 20172,640
December 31, 20188,520
What is the corrected net income for 2018?
Answer: 237,240
Pls provide solution and explanation for the answer above
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