During 2014, Organic Foods Inc. made sales of $4,000 (assume all on account) and collected cash of

Question:

During 2014, Organic Foods Inc. made sales of $4,000 (assume all on account) and collected cash of $4,100 from customers. Operating expenses totaled $800, all paid in cash. At December 31, 2014, Organic Foods' customers owed the company $400. Organic Foods owed creditors $700 on account. All amounts are in millions.
1. For these facts, show what Organic Foods Inc. would report on the following 2014 financial statements:
• Income statement
• Suppose Organic Foods had used cash-basis accounting. What would Organic Foods Ltd. have reported for these facts?
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...