The records of Summers Building Company reveal the following information for 2009.
a. Cash receipts during 2009 (including $50,000 paid by stockholders in exchange for common stock) were $220,000.
b. Cash payments during 2009 (including $8,000 of dividends paid to stockholders) were $132,000.
c. Total selling price of services billed to customers during 2009 was $183,000.
d. Salaries earned by employees during 2009 was $107,000.
e. Cost of supplies used during 2009 in operation of the business was $42,000.

Required:
1. Calculate Summers Building Company’s net income for 2009 on an accrual basis.
2. Calculate Summers Building Company’s net income for 2009 on a cash-basis.
3. Explain how the cash-basis of accounting allows for the management of income.