Revenue and Expense Recognition}

Lauhl Corporation provides janitorial services to several office buildings. During April, Lauhl engaged in the following transactions:

a. On April 1, Lauhl received \(\$ 24,000\) from Metro Corporation to provide cleaning services over the next six months.

b. On April 5, Lauhl purchased and received \(\$ 8,500\) of supplies on credit from Eagle Supply Company. During the month, Lauhl paid \(\$ 5,000\) to Eagle and used \(\$ 1,300\) of the supplies.

c. On April 20, Lauhl performed one-time cleaning services of \(\$ 2,500\) for Jones Company. Jones paid Lauhl the full amount on May 10.

d. On April 30, Lauhl paid employees wages of \(\$ 3,400\). An additional \(\$ 850\) was owed to employees for work performed in April.

\section*{Required:}

Calculate the amount of net income that Lauhl should recognize in April under (1) cash-basis accounting and (2) accrual-basis accounting.

Brief Exercise