1 Financial Reporting Theory 2 Cash versus Accrual Bases of Accounting 3 Top Notch Services was founded on January 2 and offers computer consulting and other technology-related services. During 4 its first quarter of operations, the following events occurred: 5 a. January 6 7 b. January February 8 c. 9 10 d. March 11 12 e. $ 40,000 Top Notch provided and billed clients for consulting services. The services were paid for in March $ 25,000 Top Notch provided services for clients and collected payment during the month. $ 45,000 Top Notch provided and billed clients for consulting services. $ 12,000 It collected in the current month and the remaining amount in March. $ 34,000 Top Notch provided services for clients and collected payment during the month. $ 21,000 Top Notch billed clients for an additional amount for services provided. $ 12,000 Top Notch pays employees at the end of each month for service provided. $ 13,000 $ 15,000 $ 800 Top Notch pays its utility bills at the end of each month. $ 850 $ 1,000 $ 1,200 Top Notch hired an independent contractor who provided services in February. The contractor was paid in March. 13 14 15 January February March January February March February f. 16 17 g. 18 19 20 Use the blue shaded areas on the ENTERANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the 21 Instructions tab you will be marked wrong. 22 23 Requirement Determine Top Notch's net income for each month from January through March under both the cash and the accrual bases of 24 accounting 25 Enter the answers as positive values. Use a minus sign or parentheses for any net losses. a. 26 Determine Top Notch's net income for each month from January through March under both the cash and the accrual bases of accounting. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong.) Revenue Recognition Cash Basis Accrual Basis Expense Recognition Cash Basis Accrual Basis Net Income (Loss) Cash Basis Accrual Basis Month January February March Total