Accounting(cash basis of accounting)
Roberts Company prepared the following income statement using the cash basis of accounting:
ROBERTS COMPANY
Income Statement, Cash Basis
Year Ended December 31, 2007
Service revenue (does not include $40,000 of services performed on account
because the collection will not be until 2008) $370,000
Expenses (does not include $25,000 of expenses on account because
payment will not be made until 2008) 220,000
Net income $150,000
Additional data:
1. Amortization on a company automobile for the year amounted to $6,000. This amount is not included in the expenses above.
2. On July 1, 2007, paid for a one-year insurance policy on the automobile amounting to $1,800. This amount is included in the expenses above.
