During 2013, Rumbo Corporation had cash and credit sales of $21,760 and $15,225, respectively. The company also collected accounts receivable of $9,765 and incurred operating expenses of $27,700, 80 percent of which were paid during the year. In addition, Rumbo paid $4,500 for an 18-month advertising campaign that began on September 30. Rumbo's accrual-basis net income (loss) for 2009 was

Question

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To calculate accrual-basis net income, consider all revenues earned and expenses incurred during the period. Total sales are $36,985 ($21,760 cash + $15,225 credit). Operating expenses incurred are $27,700. The advertising expense for 2013 is $1,500 ($4,500/18 months * 6 months). Net income = $36,985 - $27,700 - $1,500 = $8,535.

During 2013, Rumbo Corporation Had Cash and Credit Sales of $21,760