2. Donna Jones has just started a charity reprogramming old cell phones for use by unhoused families. Donna has arranged to get the phones free from electronic stores around town. In the first year, shelters buy $4,000 worth of phones from Donna paying her $2,100 and owing $1,900. Donna's only expense is a fee paid to the phone company to activate the phones. Total phone company fees were $3,200 for the year. Donna paid only $2,300 of the fees.

a. What is the profit or loss to Donnas charity on a cash basis?

b. What is the profit or loss to Donnas charity on an accrual basis?

c. Which basis reflects long-term stability or profitability of the business and why?