Listed below are several transactions that took place during KHTs first year of operations: Amounts billed to customers for services rendered $350,000

Cash collected from customers $260,000

Cash Disbursements: Insurance $80,000 Salaries $140,000 Advertising $15,000 In addition, you learn that at year end the company owes $25,000 to the advertising agency, and $5,000 to employees. As well, you discover the insurance paid covers 2 years and that included in cash collected from customers is a $4,000 deposit from a customer for services not yet rendered.

Required

a) Calculate accrual based operating income for KHTs first year of operations.

b) Determine the amount of accounts receivable, gross, that should be reported on KHTs statement of financial position.