You Receive $45,000 in Year 1 for a Job to Be

question 152

Essay

You receive $45,000 in year 1 for a job to be started and completed in year 2. However, you purchase materials and supplies to prepare for the upcoming job. Materials and supplies purchased in year 1 cost $33,000. In year 2 you determine that you would need to purchase an additional $29,000 in supplies.
Instructions
Determine the profit for year 1 and 2 under both accrual and cash accounting.

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Definitions:

Arterioles

Small branches of arteries that lead to capillaries, controlling blood flow and pressure via constriction and dilation.

Arteries

Blood vessels that carry oxygenated blood away from the heart to various parts of the body.

Potassium Ions

Charged particles formed from potassium atoms, essential for various bodily functions including nerve transmission and muscle contraction.

Calcium Ions

Positively charged calcium atoms that play crucial roles in various biological processes, including muscle contraction, neurotransmitter release, and bone formation.