Are my answers correct? net income, liability

[straightmarble02]

Listed below are several transactions that took place during the second two years of operations for RPG Consulting.
Year 2 Year 3
Amounts billed to customers for services rendered $350,000 $450,000
Cash collected from credit customers 260,000 400,000
Cash disbursements:
Payment of rent 80,000 –0–
Salaries paid to employees for services rendered during the year 140,000 160,000
Travel and entertainment 30,000 40,000
Advertising 15,000 35,000


In addition, you learn that the company incurred advertising costs of $25,000 in year 2, owed the advertising agency $5,000 at the end of year 1, and there were no liabilities at the end of year 3. Also, there were no anticipated bad debts on receivables, and the rent payment was for a two-year period, year 2 and year 3.


Required:
1. Calculate accrual net income for both years.
2. Determine the amount due to the advertising agency that would be shown as a liability on the RPG’s
statement of financial position at the end of year 2.

My Answers
1. Year 2 Year 3
Revenues $350,000 $450,000
Expenses:
Rent (40,000) (40,000)
Salaries (140,000) (160,000)
Travel & entertainment (30,000) (40,000)
Advertising (15,000) (35,000)
__________________ ____________________
Net Income $125,000 175,000


2. Amount owed at the end of year 1 $5,000
Add: advertising costs incurred in year 2 25,000
_____________________________________
$30,000
Less: amount paid in year 2 (15,000)
=====================================
Liability at the end of year 2 =$15,000

 

[Triest123]

The advertising expense for year 2 is $25,000
The advertising expense for year 3 is ($35,000 - $15,000) = $20,000

 

[straightmarble02]

Thank you, Triest123.
1. Year 2 Year 3
Revenues $350,000 $450,000
Expenses:
Rent (40,000) (40,000)
Salaries (140,000) (160,000)
Travel & entertainment (30,000) (40,000)
Advertising (25,000) (20,000)
__________________ _______________
Net Income $115,000 190,000