Calculate the first year’s net income

Calculate the first year’s net income

In its first year of operations, Athabasca Corp. earned $60,000 in service revenue. Of that amount, $8,600 was on account and the remainder, $51,400, was collected in cash from customers.The company incurred various expenses totalling $32,300, of which $28,800 was paid in cash. At year end, $3,500 was still owing on account. In addition, Athabasca prepaid $2,000 for insurance coverage that covered the last half of the first year and the first half of the second year. Athabasca expects to owe $3,000 of income tax when it files its corporate income tax return after year end


 

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