ACC-250 Week 3 Topic 3 DQ 2 Chapter 3 Critical Thinking: Decision Case 3-1 One year ago, Tyler Stasney founded Swift Classified Ads

Respond to the following question, exercise, problem, or case in your textbook: “Chapter 3 Critical Thinking: Decision Case 3-1.” Please use complete sentences, cite any sources used, and answer all required parts.

ACC-250 Week 3 Topic 3 DQ 2 Grand Canyon University

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One year ago, Tyler Stasney founded Swift Classified Ads. Stasney remembers that you took an accounting course while in college and comes to you for advice. He wishes to know how much net income his business earned during the past year in order to decide whether to keep the company going. His accounting records consist of the T-accounts from his ledger, which were prepared by an accountant who moved to another city. The ledger at December 31 follows. The accounts have not been adjusted.

Stasney indicates that at year-end, customers owe him $1,600 for accrued service revenue. These revenues have not been recorded. During the year, Stasney collected $4,000 service revenue in advance from customers, but he earned only $900 of that amount. Rent expense for the year was $2,400, and he used up $1,700 of the supplies. Stasney determines that depreciation on his equipment was $5,000 for the year. At December 31, he owes his employee $1,200 accrued salary.

Requirement

  1. Help Stasney compute his net income for the year. Advise him whether to continue operating Swift Classified Ads

Course: ACC-250 Financial Accounting
School: Grand Canyon University

  • 31/05/2018
  • 5
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