Question
O'Brien Industries collected $190,000 from customers in 2022. Of the amount collected, $40,000 was from revenue accrued from services performed in 2021, and $20,000 was
O'Brien Industries collected $190,000 from customers in 2022. Of the amount collected, $40,000 was from revenue accrued from services performed in 2021, and $20,000 was received in advance for 2023 revenue. In addition, O'Brien earned $60,000 of revenue in 2022, which will not be collected until 2023. O'Brien also earned $25,000 of revenue in 2022 which had been collected in 2021. O'Brien Industries paid $150,000 for expenses in 2022. Of the amount paid, $50,000 was for expenses incurred on account in 2021, $22,000 was paid in advance for 2023 expenses. In addition, O'Brien incurred $78,000 of expenses in 2022, which will not be paid until 2023. O'Brien also incurred $29,000 of expenses in 2022 which had been paid in 2021.
What is the cash basis net income?
What is the accrual basis net income?
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