Business, 12.03.2021 15:20 greenhusky

In its first year of operations, Ivanhoe Company recognized $29,800 in service revenue, $7,000 of which was on account and still outstanding at year-end. The remaining $22,800 was received in cash from customers. The company incurred operating expenses of $19,000. Of these expenses, $13,140 were paid in cash; $5,860 was still owed on account at year-end. In addition, Ivanhoe prepaid $3,150 for insurance coverage that would not be used until the second year of operations. (a) Calculate the first yearâ€™s net earnings under the cash basis of accounting, and the first yearâ€™s net earnings under the accrual basis of accounting.

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In its first year of operations, Ivanhoe Company recognized $29,800 in service revenue, $7,000 of wh...

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