2. Hal Smith opened Smith’s Management Company on March 1 of the current year. During March,...

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Accounting

2. Hal Smith opened Smith’s Management Company on March1 of the current year. During March, the following transactionsoccurred and were recorded in the company'sbooks:
1. Smith invested $10,000 cash in the business.
2. The company paid $5,200 for salaries for the month.
3. The company paid $1,600 cash to rent office space for themonth.
4. Smith withdrew $5,000 for his personal use from thecompany.
5. The company received $19,000 cash for management servicesprovided during March.
6. The company provided $12,000 of management services to customerson account.
7. The company paid cash of $500 for monthly utilities.
8. The company received $3,100 cash in advance of providingmanagement services to a customer.
Based on this information, accrual basis net income for Marchwould be:
_
Based on this information, cash basis net income for March wouldbe:
_

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All working forms part of the answer When Cash Basis accounting is being followed Revenues are recorded ONLY when Cash is received If services are provided or Goods are sold but no cash is received Sales Revenue or Service Revenue will not be See Answer

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Transcribed Image Text

2. Hal Smith opened Smith’s Management Company on March1 of the current year. During March, the following transactionsoccurred and were recorded in the company'sbooks:1. Smith invested $10,000 cash in the business.2. The company paid $5,200 for salaries for the month.3. The company paid $1,600 cash to rent office space for themonth.4. Smith withdrew $5,000 for his personal use from thecompany.5. The company received $19,000 cash for management servicesprovided during March.6. The company provided $12,000 of management services to customerson account.7. The company paid cash of $500 for monthly utilities.8. The company received $3,100 cash in advance of providingmanagement services to a customer.Based on this information, accrual basis net income for Marchwould be:_____________________Based on this information, cash basis net income for March wouldbe:_____________________