Based on the following transactions, calculate the revenues and expenses that would be reported
(a) On the cash basis
(b) On the accrual basis:
i. Inventory costing $70,000 was purchased on account.
ii. Inventory costing $60,000 was sold for $100,000. Eighty percent of the sales were for cash.
iii. Cash collected from credit customers (i.e., who bought on account) totalled $20,000.
iv. A lease was signed at the beginning of the year, requiring monthly payments of $1,000. The rent for the first month was paid when the lease was signed. After that, the $ 1,000 rent was paid on the last day of each month, to cover the following month.
v. Office supplies costing $5,500 were purchased for cash. At the end of the year, $500 of the office supplies were still unused.
vi. Wages of $37,500 were paid during the year. Also, wages of $500 remained unpaid at year end.