For 1 month, a company bills out $38,000 in completed work and receives $22,000 in payments plus $8,000 from the previous month's billings. They pay their total bill of $26,000 to supply houses for this month's purchases and another $5,000 for last month's purchases. What is the company's net income for the month using a cash accounting method?

To determine the company's net income for the month using a cash accounting method, we need to analyze the cash inflows and outflows accurately.

First, we calculate the total cash inflows. The company received $22,000 from current billings and an additional $8,000 from previous month's billings. Therefore, the total cash inflow for the month is $22,000 + $8,000 = $30,000.

Next, we must account for the cash outflows. The company paid $26,000 for the current month's supplies and $5,000 for last month's purchases. This results in a total cash outflow of $26,000 + $5,000 = $31,000.

Now, we can calculate the net income by subtracting the total cash outflows from total cash inflows:

Net Income = Total Cash Inflows - Total Cash Outflows

Net Income = $30,000 - $31,000 = -$1,000

This calculation shows a net loss of $1,000 for the month. Hence, this conclusion aligns perfectly with the fact that company's financial activity during this period resulted in an overall decrease in cash on hand.

Thus, the loss of $1,000 reflects