During 2017, Organic Foods Inc. made sales of $4,000 (assume

During 2017, 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, 2017, Organic Foods's 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 2017 financial statements:

• Income statement

• Balance sheet

2. Suppose Organic Foods had used cash-basis accounting. What would Organic Foods Ltd. have reported for these facts?

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