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Jerrys Janitorial Services Company has just completed its first year of operations. During the year, the following events took place. Customer payments in the amount
Jerrys Janitorial Services Company has just completed its first year of operations. During the year, the following events took place.
- Customer payments in the amount of $1,280 were received at the time the cleaning services were performed.
- Another $700 of cleaning services were performed on account for customers; payments amounting to $120 have been received from those customers.
- On the last day of the year, a local company paid Jerry $60 for cleaning services to be performed in 30 days.
- Employee wages totaled $500 and were paid in cash.
- The cleaning supplies that were used to perform the cleaning services were paid for in cash and amounted to $520.
- The company rented equipment (vacuums, carpet machines, etc.) used in cleaning; at the end of the year the company owed $20 to the equipment rental company for equipment rented and used during the year.
- On the last day of the year, Jerry paid $240 in advance for rent on some office space.
Using accrual basis accounting, how much net income will Jerry report for the year?
a. $580
b. $700
c. $920
d. $940
e. none of the above
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