Listed below are several transactions that took place during the second two years of operations for RPG Consulting.

Year 2			Year 3
Amounts billed to customers for services rendered	$	430,000		$	530,000
Cash collected from credit customers		340,000			480,000
Cash disbursements:
Payment of rent		88,000			0
Salaries paid to employees for services rendered during the year		148,000			168,000
Travel and entertainment		38,000			48,000
Advertising		19,000			43,000

In addition, you learn that the company incurred advertising costs of $33,000 in year 2, owed the advertising agency $5,800 at the end of year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated bad debts on receivables, and the rent payment was for a two-year period, year 2 and year 3.

Required:

1.

Calculate accrual net income for both years.

	Year 2	Year 3
Revenues	$430,000	$530,000
Expense
Rent
Salaries
Travel & entertainment
Advertising
Net income

2.

Determine the amount due the advertising agency that would be shown as a liability on the RPGs balance sheet at the end of year 2.

Advertising liability at end of Year

$_____________