Freddie's Fish Store maintains saltwater aquariums for office buildings in Anchorage. The following events occurred during the first two months of 2018. Determine the net income for each month using both the cash and accrual bases. For depreciable items use straight line depreciation with no salvage value.
a. In January, Freddie's purchased a new industrial vacuum for cleaning tanks - it is expected to last 5 years, and cost $5,000.
b. In January, Freddie's collected $30,000 prepayment for cleaning services to be completed during January and February.
c. In February, Freddie's signed a new client, collecting $6,000 for six months of services.
d. In February, Freddie's paid its bimonthly utility bill of $500 for two months of utilities. The bill covers the current and prior months. They are always billed this amount and are paid at the end of every two months.

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The Answer of Freddie's Fish Store maintains saltwater aquariums for office buildings in Anchorage. The following events occurred during the first two months of 2018. Determine the net income for each month using both the cash and accrual bases. For depreciable items use straight line depreciation with no salvage value.
a. In January, Freddie's purchased a new industrial vacuum for cleaning tanks - it is expected to last 5 years, and cost $5,000.
b. In January, Freddie's collected $30,000 prepayment for cleaning services to be completed during January and February.
c. In February, Freddie's signed a new client, collecting $6,000 for six months of services.
d. In February, Freddie's paid its bimonthly utility bill of $500 for two months of utilities. The bill covers the current and prior months. They are always billed this amount and are paid at the end of every two months.

Freddie's Fish Store Maintains Saltwater Aquariums for Office Buildings in Anchorage