Bowen Company made sales of $200,000 to customers of which it received $140,000 in cash. Bowen incurred $120,000 in operating expense , of which it paid $90,000 in cash.
a. Show how the accrual basis net income is derived
b. Show how the cash basis net income is derived
c. Assume that while $200,000 of sales above were billed to customer in Year 1, customers remitted payments for $120,000 in Year 2. During which Year would revenues be reported on the Income Statement under, first, the accrual basis, and second the cash basis?