You receive $45,000 in year 1 for a job to be started and completed in year 2. However, you purchase materials and supplies to prepare for the upcoming job. Materials and supplies purchased in year 1 cost $33,000. In year 2 you determine that you would need to purchase an additional $29,000 in supplies.
Instructions
Determine the profit for year 1 and 2 under both accrual and cash accounting.

Question

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The Answer of You receive $45,000 in year 1 for a job to be started and completed in year 2. However, you purchase materials and supplies to prepare for the upcoming job. Materials and supplies purchased in year 1 cost $33,000. In year 2 you determine that you would need to purchase an additional $29,000 in supplies.
Instructions
Determine the profit for year 1 and 2 under both accrual and cash accounting.

You Receive $45,000 in Year 1 for a Job to Be