Freddie's Fish Store maintains saltwater aquariums for office buildings in Anchorage.The following events occurred during the first two months of 2015.Determine the net income for each month using both the cash and accrual basis.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 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.They are always billed this amount and pay at the end of the cycle.

Question

Quizplus · Accepted Answer

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 2015.Determine the net income for each month using both the cash and accrual basis.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 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.They are always billed this amount and pay at the end of the cycle.

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