Question: Based on the following transactions calculate the revenues expenses and

Based on the following transactions, calculate the revenues, expenses, and net income that would be reported on
(a) The cash basis
(b) 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 (those 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. Supplies costing $5,500 were purchased for cash. At the end of the year, $500 of the supplies were still unused.
vi. Wages of $37,500 were paid during the year. Also, wages of $500 remained unpaid at year end.

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