Hal Corp Prepared the Following Income Statement Using the Cash Basis

question 115

Essay

Hal Corp. prepared the following income statement using the cash basis of accounting: $\begin{array}{c}\text {HAL CORP}\\\text {Income Statement, Cash Basis }\\\text {For the Year Ended December 31, 2016}\\\\\begin{array}{lrr}\text { Service revenue (does not include } \$ 25,000 \text { of services rendered on account }&\\ \text { because the collection will not be until 2017) } &\$370,000\\ \text { Expenses (does not include \( \$ 15,000 \) of expenses on account because} &\\ \text { payment will not be made until 2017)} &220,000\\ \text { Net income } &\$150,000\\\end{array}\end{array}$
Additional data:
1. Depreciation on a company automobile for the year amounted to $6000. This amount is not included in the expenses above.
2. On January 1 2016 paid for a two-year insurance policy on the automobile amounting to $1800. This amount is included in the expenses above.
Instructions
(a) Recast the above income statement on the accrual basis in conformity with generally accepted accounting principles. Show computations and explain each change.
(b) Explain which basis (cash or accrual) provides a better measure of income.

Recognize the implications of land supply inelasticity on the economy.

Comprehend the factors affecting changes in land rent and demand for land.

Explore the impact of technological advancements and market changes on the value and use of land.

Understand the significance and arguments for and against a single tax on land as proposed by Henry George.

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Definitions:

External Locus

A belief that control over events and outcomes lies outside oneself.

Exercise Regimen

A planned, structured set of physical activities designed to improve or maintain physical fitness.

Motivation

The method that starts, directs, and sustains actions aimed at achieving specific goals.

Predisposing Factors

Elements or conditions that make an individual more susceptible or inclined to develop a particular health issue or disease.