In December 2018, Quality Contractor signs an agreement to construct a garage for $22,000.00. In January 2019, Quality begins construction of the garage and incurred cost of $18,000.00 on credit. By the end of January, Quality delivers the finished garage to the buyer. In February 2019, Quality collects $22,000.00 from the buyer, and in March 2019 pays the full amount due to the creditors.
You are required to prepare the income statement under the cash and accrual bases from information in the scenario. Your answers should be presented in the format similar to the templates below.
QUALITY CONTRACTOR
INCOME STATEMENT – CASH BASIS
FOR THE MONTH OF:
January February March Total
?? Receipts
?? Payments
Net Income (loss)
2.5 marks
QUALITY CONTRACTOR
INCOME STATEMENT – ACCRUAL BASIS
FOR THE MONTH OF:
January February March Total
??Receipts
?? Payments
Net Income (loss)
