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18. A small consulting firm had the following transactions over a two-month period, December 20X6...

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Accounting

18. A small consulting firm had the following transactions over a two-month period, December 20X6 and January 20X7, and no other transactions. Client services were

performed and billed during December 20X6 for total fees of $109,000. Of this amount, $82,000 was collected in December 20X6 and the balance was collected in January 20X7. Expenses incurred to service these clients during December 20X6 were $80,000, of which $42,000 was paid in December 20X6 and the remaining $38,000 was paid in January 20X7. What was the net income for the month of December 20X6 under the approaches shown below?

Accrual-based approach Cash-based approach

a. $67,000 $2,000

b. $29,000 $40,000

c. $29,000 $2,000

$67,000 $40,000

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