Answer:
a. $33,000
b. $36,000
Explanation:
The computation is shown below:
a. Cash basis net income
= Collection from customers - expenses paid
= $105,000 - $72,000
= $33,000
b. Accrual basis net income
= Service performed - expenses incurred
where,
Service performed is
= $105,000 - $25,000 + $40,000
= $120,000
And, the expenses incurred is
= $72,000 - $30,000 + $42,000
= $84,000
So, the net income under accrual basis is
= $120,000 - $84,000
= $36,000