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Question - Given the data below for a firm in its first year of operation, determine net income under the cash basis of accounting? What is the net Income using the cash basis of accounting?
Cash received from customers $41400
Accounts receivable 11040
Cash paid for expenses 23920
Accounts payable (related to expenses) 2760
Prepaid rent for next period 6440
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A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.
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