Chuck Corporation Began Operating a New Retail Business in the Current

question 118

Essay

Chuck 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:

King Henry VIII

The king of England from 1509 to 1547, known for his six marriages and role in the separation of the Church of England from the Roman Catholic Church.

1555 Papal Bull

refers to the 'Peace of Augsburg,' a decree by the Holy Roman Emperor that allowed princes to choose either Lutheranism or Roman Catholicism as the official confession in their territories.

Paul IV

Pope from 1555 to 1559, who was notable for his role in the Counter-Reformation and his efforts to enforce the censorship of publications.

Council of Trent

An ecumenical council of the Roman Catholic Church convened between 1545 and 1563 to address the challenges of the Protestant Reformation and clarify Catholic doctrine.