In its first year of operations, Roma Company reports the following. Earned revenues of $57,000 ($49,000 cash received from customers). Incurred expenses of $31,500 ($24,450 cash paid toward them). Prepaid $9,750 cash for costs that will not be expensed until next year. Compute the company's first year net income under both thecash basis and the accrual basis of accounting.

Computation of expenses under Cash basis

Particulars                                     Amount$

Expenses paid                                 $24,450

Add: Prepaid expenses paid           $9,750

Total expenses paid                        $34,200  

Computation of the Net Income

Particulars             Cash basis        Accrual basis

Revenue                 $49,000            $57,000

Less: Expenses      $34,200            $24,450

Net Income            $14,800            $32,550

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

um sure