In its first year of operations, Roma Company reports the following. Earned revenues of $56,000 ($48,000 cash received from customers). Incurred expenses of $31,000 ($24,100 cash paid toward them). Prepaid $9,500 cash for costs that will not be expensed until next year. Compute the company’s first-year net income under both the cash basis and the accrual basis of accounting.

Net income;

Under accrual basis is $25,000

Under cash basis is $14,400  

Step-by-step explanation:

Under the accrual basis of accounting, revenue is recognized when it is earned and not necessarily when cash is collected. Services may be rendered on account or cash.

Expense may be incurred on account or cash basis. In the accrual system, the expense is recorded once it is incurred and not necessarily when cash is collected.

In the cash basis, both revenue and expense are only recognized when cash is collected and paid respectively.

Net income is the difference between the revenue and the expenses for a given period.

Under accrual basis,

net income = $56,000 - $31,000

= $25,000

Under the cash basis,

Net income = $48,000 - $24,100 - $9,500

= $14,400  

mr. flanders’ class sold 47 doughnuts and   mr. rodriquez’s class sold 38 cartons of milk

step-by-step explanation:

let x be the number of doughnuts sold by mr. flanders’ class and y be the number of cartons sold by mr. rodriquez’s class.

1. together, the classes sold 85 items, then

x+y=85.

2. both classes earn earned $104.49 for their school. if doughnuts were sold for $1.35 each, then x doughnuts costed $1.35x. if cartons of milk were sold for $1.08 each, then y cartons costed $1.08y. hence,

1.35x+1.08y=104.49.

3. solve the system of two equations: