The following data relate to Jones Company for the year ended December 31, 2007:
|
Sales on credit
|
$80,000
|
|
Cost of inventory sold on credit
|
65,000
|
|
Collections from customers
|
60,000
|
|
Purchase of inventory on credit
|
50,000
|
|
Payment for purchases
|
55,000
|
|
Cash collections for common stock
|
30,000
|
|
Dividends paid
|
10,000
|
|
Payment to salesclerk
|
10,000
|
Required:
a. Determine income on an accrual basis.
b. Determine income on a cash basis.