Question:
Lauhl Corporation provides janitorial services to several office buildings. During April, Lauhl engaged in the following transactions:
1. On April 1, Lauhl received $62,400 from Metro Corporation to provide cleaning services over the next 6 months.
2. On April 5, Lauhl purchased and received $8,500 of supplies on credit from Eagle Supply Company. During the month, Lauhl paid $5,000 to Eagle and used $1,300 of the supplies.
3. On April 20, Lauhl performed one-time cleaning services of $4,500 for Jones Company. Jones paid Lauhl the full amount on May 10.
4. On April 30, Lauhl paid employees wages of $6,400. An additional $850 was owed to employees for work performed in April.
Required:
1. Calculate the amount of net income that Lauhl should recognize in April under cash-basis accounting.
2. Calculate the amount of net income that Lauhl should recognize in April under accrual-basis accounting.