Accrual accounting income determination [LO2-4, 2-8) During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2018, you a. An insurance polilcy covering three years was purchased on January 1, 2018, for $4.800. The entire amount was debited to 10 points expense and no adjusting entry was recorded for this Item.
b. During 2018, the company receved a $725 cash advance from a customer for merchandise to be manufactured and shipped In 2019. The $725 was credited to sales revenue. No entry was recorded for the cost of merchandise
c. There were no supples listed In the balance sheet under assets.
d. However, you discover that supplies costing $715 were on hand at 31. $1 a local bank on October 1, 2018, Principal and interest at 12% will be paid on September 30, 2019 NO accrual was recorded f
e. Net Income reported In the 2018 income statement is $35,000 before reflecting any of the above Items.
Determine the proper amount of net Income for 2018. (Amounts to be deducted should be Indicated by a minus sign.)