Question - Primo Industries collected $105,000 from customers in 2015. Of the amount collected, $25,000 was for services performed in 2014. In addition, Primo performed services worth $40,000 in 2015, which will not be collected until 2016.

Primo Industries also paid $72,000 for expenses in 2015. Of the amount paid, $30,000 was for expenses incurred on account in 2014. In addition, Primo incurred $42,000 of expenses in 2015, which will not be paid until 2016.

Instructions -

(a) Compute 2015 cash-basis net income.

(b) Compute 2015 accrual-basis net income.