In its first year of operations, Grace Company reports the following: Earned revenues of $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. Net income under the accrual basis of accounting is:
A) $13,000.
B) $21,000.
C) $25,000.
D) $17,000.
E) None of these options are correct

Question

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The Answer of In its first year of operations, Grace Company reports the following: Earned revenues of $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. Net income under the accrual basis of accounting is:
A) $13,000.
B) $21,000.
C) $25,000.
D) $17,000.
E) None of these options are correct

In Its First Year of Operations, Grace Company Reports the Following