Reference no: EM132577960

Primo Industries collected $105,000 from customers in 2019. Of the amount col- lected, $25,000 was for services performed in 2018. In addition, Primo performed services worth $40,000 in 2019, which will not be collected until 2020.

Primo Industries also paid $72,000 for expenses in 2019. Of the amount paid, $30,000 was for expenses incurred on account in 2018. In addition, Primo incurred $42,000 of expenses in 2019, which will not be paid until 2020.

Instructions

Question 1: Compute 2019 cash-basis net income.

Question 2: Compute 2019 accrual-basis net income.

Question 3: Distinguish between cash and accrual basis of accounting.

Question 4: Compute cash and accrual accounting income.