Posted by Roberta on .
The Harding Co. in its first year earned $39,000 in revenues and received $33,000 cash from customers. They incurred expenses $22,000, but had not paid $2,250 of them at year-end. Harden also prepaid $3,750 cash for expenses to be incurred in the next year.
Calculate the first year's net income under both the cash basis and accrual basis of accounting. How do I do this, the textbook only gives an example for prepaid insurance?