| Accrual and cash basis accounting
In its first year of operations, Harden Co. earned $39,000 in revenues and received $33,000 cash from
these customers. The company incurred expenses of $22,500 but had not paid $2,250 of them at yearend.
Harden also prepaid $3,750 cash for expenses that would be incurred the next year. Calculate
the first year’s net income under both the cash basis and the accrual basis of accounting.
I am trying to figure out this answer...i came up with 12,750 for the cash basis net income, but I got the same thing for accrual....Help please!!!
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