Using the following information, calculate accrual profit for the year ended 30 June 2019.

Question

Quizplus · Accepted Answer

Accrual profit = Revenue earned during the year – Expenses incurred during the year
Revenue earned during the year = $2,350,000
Expenses incurred during the year = Cost of sales ($950,000) + Operating expenses ($1,224,000) + Interest expense ($60,000) = $2,234,000
Accrual profit for the year ended 30 June 2019 = $2,350,000 – $2,234,000 = $116,000
However, we need to add back the increase in accrued expenses = $60,000
Therefore, the total accrual profit for the year ended 30 June 2019 = $116,000 + $60,000 = $176,000.

Using the Following Information, Calculate Accrual Profit for the Year