Sandra Owns an Insurance Agency Calculate Sandra's Net Profit Using the Cash Method for 2017

question 99

Essay

Sandra owns an insurance agency.The following selected data are taken from the agency balance sheet and income statement prepared using the accrual method. $\begin{array}{lr}\text { Revenue } & \$ 250,000 \\\text { Salaries and commissions } & 100,000 \\\text { Rent } & 10,000 \\\text { Insurance } & 5,000 \\\text { Utilities } & 6,000 \\\text { Accounts receivable, } 1 / 1 / 2017 & 40,000 \\\text { Accounts receivable, } 12 / 31 / 2017 & 38,000 \\\text { Accounts payable, } 1 / 1 / 2017 & 12,000 \\\text { Accounts payable, } 12 / 31 / 2017 & 11,000\end{array}$ Calculate Sandra's net profit using the cash method for 2017.

---

Definitions:

Profits

The financial gain that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Nonprofit Organizations

Entities that operate for purposes other than generating profit, focusing on charitable, educational, or public service objectives.