Financial Reporting Theory Cash versus Accrual Bases of Accounting Top Notch Services was founded on January 2 and offers computer consulting and other technology-related services. During its first quarter of operations, the following events occurred: a. January $ 40,000 Top Notch provided and billed clients for consulting services. The services were paid for in March. b. January $ 25,000 Top Notch provided services for clients and collected payment during the month. c. February $ 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. d. 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. e. January $ 12,000 Top Notch pays employees at the end of each month for service provided. February $ 13,000 March $ 15,000 f. January $ 800 Top Notch pays its utility bills at the end of each month. February $ 850 March $ 1,000 g. February $ 1,200 Top Notch hired an independent contractor who provided services in February. The contractor was paid in March. 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 Instructions tab you will be marked wrong. Requirement Determine Top Notchs net income for each month from January through March under both the cash and the accrual bases of accounting. a. Enter the answers as positive values. Use a minus sign or parentheses for any net losses. Saving & Submitting Solution 1 Save file to desktop. a. Create folder on desktop, and label COMPLETED EXCEL PROJECTS 2 Upload and submit your file to be graded. a. Navigate back to the activity window - screen where you downloaded the initial spreadsheet b. Click Choose button under step 3; locate the file you just saved and click Open c. Click Upload button under step 3 d. Click Submit button under step 4 Viewing Results 1 Click on Results tab in MyAccountingLab 2 Click on the Assignment you were working on 3 Click on Project link; this will bring up your Score Card 4 Within Score Card window, click on Live Comments Report (lower right) to download spreadsheet with feedback

E 1 C. D F TJ K 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 8 9