[ashokkanth]

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.

Questions
a) Prepare Roberts Company's income statement on the accrual basis in conformity with GAAP. Show calculations and explain.
b) Explain which basis (cash or accrual) provides a better measure of income.

[pready]

So what is your question? You have the information needed to turn the cash basis of accounting to the accrual basis of accounting.