Acc280 Financial Accounting: E3-3 Conan Industries collected $100,000

Acc280 Financial Accounting
Exercise 3-3
Conan Industries collected $100,000 from customers in 2008. Of the amount collected,$25,000 was from revenue earned on account in 2007. In addition, Conan earned $40,000 of revenue in 2008, which will not be collected until 2009.
Conan Industries also paid $70,000 for expenses in 2008. Of the amount paid, $30,000 was for expenses incurred on account in 2007. In addition, Conan incurred $42,000 of expenses in 2008, which will not be paid until 2009.

Instructions
(a) Compute 2008 cash-basis net income.
(b) Compute 2008 accrual-basis net income.
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