Chance Corporation Began Operating a New Retail Business in the Current

question 48

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 the accrual method? Under the cash method?

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Definitions:

Persuasion Process

The act or method of influencing someone's beliefs, attitudes, intentions, motivations, or behaviors through argument, reasoning, or appeal.

Asch's Studies

A series of experiments led by Solomon Asch in the 1950s demonstrating the power of conformity in groups, where individuals often agreed with incorrect majority opinions.

Standard Line

Often refers to a commonly accepted benchmark or norm within a given context, such as manufacturing, testing, or evaluating outcomes.

Credibility

The quality or power of inspiring belief; how trustworthy or believable a person, organization, or piece of information is perceived to be.