Chance Corporation Began Operating a New Retail Business in the Current

question 1301

Essay

Chance Corporation began operating a new retail business in the current year and had $500,000 of sales, $70,000 of which had not been collected by year- end. Total purchases were $350,000 on which $30,000 is still owed. Ending inventory is $60,000; operating expenses are $170,000, $50,000 of which is still owed at year- end.
a. Compute net income from the business under the accrual method.
b. Compute net income from the business under the cash method.
c. Would paying the $50,000 she owes for operating expenses before year- end change her net income under th accrual method? Under the cash method?

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Definitions:

Tickled

The sensation or reaction caused by light touching of the skin that involuntarily produces laughter or twitching movements.

Somatosensory Cortex

A region of the brain within the parietal lobe responsible for processing sensory input from the body, such as touch, temperature, and pain.

Sensory Stimuli

External or internal factors that are detected by sensory receptors, leading to specific physiological or psychological responses.

Social Influences

How the presence or actions of others affect an individual's behavior, thoughts, and feelings.